Estimates are soaring after recent earnings surprise but actions of this rank of Zacks # 1 (Strong Buy) are a fantastic entry point.
Description of the company NVIDIA provides visual technologies that allow for interactive video games, PCS and mobile devices. Its primary segment is the graphics processing unit, or GPU, which allows you to dramatically realistic images.
The CEO recently said, "even if we are extending our leadership in visual computing, our investments in mobile computing and parallel computing are now driving our growth."
Another surprise
On Feb 16 NVIDIA has reported the results of the fourth quarter that came in ahead of expectations. EPS was $ 0.23, better than the Zacks consensus estimate of 2 cents. Net income more than doubled on a sequential basis to $ 172 million.
The top line of the company increased 5% compared to previous period $ 886 million. While this was down on a year-on-year, the company headed higher thanks to announcements from key customers, including Acer, Dell, LG and Motorola.
A flurry of revisions of estimates
Technically, revisions of estimates were mixed, but upward revisions to surpass that drastically lowered. For the fiscal year 2012, the year, we received 34 moves higher than the lower 6 in the past 30 days.
The Zacks consensus estimate for this year is 29 cents for the fiscal year 2012, to $ 1.02. Would be improved by 57% compared to last year. The forecasts of next year are up 40 cents on average $ 1.24, that is a growth rate of 22%.
Ratings
Assessments aren't NVIDIA strong suit, but given the momentum of earnings is not too much of a prize. The forward p/e is about 18 times, not bad for a specialty technology company. Take account of these growth rates and you have a PEG of 1,3 times, not a discount but is not overpriced.
The chart
This increase that began early in 2011 can be attributed to the Consumer Electronics Show. A series of announcements about uses for NVIDIA came out products, ranging from BMW and Tesla uses in a cross-licensing fee of $ 1.5 billion from Intel.
Because all emotions but actions have cooled, forming a nice level of support and a great entry.
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