NVIDIA Corporation ($NVDA) Earnings (Q2 FY23)

 NVIDIA Corporation ($NVDA) Earnings and Opinion:


NVIDIA is a company in the Technology sector and operates in the Semiconductors industry. The company provides graphics, and compute and networking solutions all over the world. NVIDIA was founded in 1993 and is currently headquartered in Santa Clara, California. The company made its debut on the stock market in 1999.

NVIDIA Earnings Results:

  • Revenues of $6.7B missing expectations of $8.1B
  • Gross Profit $3.07B missing expectations of $5.44B
  • Operating Income of $1.33B missing expectations of $3.69B
  • Adjusted EPS of $0.51 missing expectations of $0.53
  • Guidance missed, except for Gross Margin that beat by 200bps
Opinion:
Nvidia is currently moving down after reporting earnings after the market closed this afternoon. The earnings were already released earlier in the quarter, so the losses and earnings were no surprise to investors. The main look for most people, was the guidance that the company gave out. They are expected to continue a downtrend currently. A lot of people are fluttered, but this company was super hot when gaming and crypto was hot. With those things cooling off a bit, it is no surprise to see a bit of a struggle with the company. The company is widely diverse, which can be beneficial so they can expand to more markets. However, it is coming back to bite them right now. Hopefully an uprise will come again with crypto and gaming, to put the company back on track. I think they will ramp up focus on more on semiconductors and other areas that seem to be serving them well. As far as valuation, the stock is very volatile right now. With the Pelosi's interfering with some trading and the CHIPS act getting passed. Looking at more of a value component, P/E ratio is extremely high at 49.77 and P/S is also extremely high at 15.93. The thing that stands out is the profitability measures, with ROA and ROE both at really strong percentages. Also, the current ratio is 5.32 and cash outweighs debt by a couple billion. Therefore, default doesn't seem to be in the near term, even after underachieving expectations. In my opinion, Nvidia shouldn't be defined by this earnings report. Sure, it is not a good look, but you have to see the bigger picture. Looking down the road, in about 10 years, this company has one of the best potential to be a Top 5 company. They cover so many parts of the market, and are only continually growing with technology. I think the upside is huge for the long-term, which makes me long Nvidia.


*Information from Yahoo Finance, CMLVIZ, CSI Market, and Consensus Gurus.

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