NVIDIA Corporation (NASDAQ:NVDA) blew away expectations for its second-quarter earnings, posting sales and EPS of $1.15 billion and $0.26, topping consensus’ estimates of $1.01 billion and $0.11, respectively. Against a tough macro environment, NVDA reported strong growth in Gaming GPUs. In reaction, the stock price surged 9.88% on Friday.

However, somber PC OEM prospects and full valuation keep analyst Rick Schafer of Oppenheimer sidelined. In his research report, Schafer reiterated a Perform rating on Nvidia Corporation shares, without providing a price target.

Schafer commented, “In light of well understood near-term PC challenges, we believe NVDA’s commitment to shareholder returns should support shares as the company awaits a new-product fueled top-line re-acceleration. Following the updated outlook, our CY15E/CY16E EPS move from $0.68/$0.84 to $0.78/$1.00, respectively.”

“We applaud NVDA’s commitment to shareholder returns as well as the longterm potential of GRID, Auto and Tesla. However, PC market declines remain a near-term headwind. We remain sidelined here.”, the analyst added.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Rick Schafer has a total average return of 21.4% and a 74.8% success rate. Schafer is ranked #25 out of 3728 analysts.

Out of the 23 analysts polled by TipRanks, 9 rate Nvidia Corporation stock a Buy, 12 rate the stock a Hold and 2 recommend Sell. With a return potential of 1.8%, the stock’s consensus target price stands at $22.89.


NVDA Chart