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Top Analyst Sets Expectations on Nvidia (NVDA) Stock Ahead of Earnings


Even though the semiconductor industry has been on a tear these past few years, some investors are starting to question whether or not high growth rates can be maintained going forward. Investors will get an idea of how business has been at Nvidia (NVDA) when the company reports third-quarter fiscal 2019 earnings after market close on Thursday, November 15.

Reflecting the uptick in near-term uncertainty, B.Riley FBR’s top analyst Craig Ellis trims his price target from $250 to $240, but retains a Buy rating on NVDA shares.

Is it worth listening to this analyst? The answer is clearly yes. According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Craig Ellis has a yearly average return of 22.6% and a 60% success rate. Ellis has a 87.1% average return when recommending NVDA, and is ranked #32 out of 4883 analysts.

Ellis wrote, “While we believe the Street’s $3.242B (+3.8%)/$1.93 and $3.415B (+5.3%)/$2.04 are makeable, an unusual number of crosscurrents have potential to disrupt historically strong operating and financial execution (we are $3.260B (+4.4%)/$1.95 and $3.477B (+6.7%)/$2.12). On the plus side, the SAM-expansive new product flow we’ve expected has flourished across all platform groups, from Gaming’s GeForce 2080 Ti, 2080, and 2070 releases, Data Center’s DGX-2, RTX Server, and Turing T4 Cloud GPU to Pro Visualization’s Quadro RTX 5k & 6k, with the RTX 8k coming in 4Q. Further, numerous end demand signals are strong.”

However, “We now see greater risk to our FY19-21 estimates of $13.068B (+34.5%)/$8.06, $14.643B (+12.1%)/$8.95 and $17.331B (+18.4%)/$11.25 than we expected even a month ago, but continue to note strong existing platform group SAM expansion and new platform group extension into Healthcare and Robotics long term,” the analyst added.

TipRanks reveals the graphics chip manufacturing giant as one drawing bullish attention on Wall Street. Out of 28 analysts polled in the last 3 months, 22 rate a Buy on Nvidia stock, while 6 issue a Hold on the stock. The 12-month average price target stands at $285.73, marking a nearly 42% upside potential from where the stock is currently trading. (See NVDA’s price targets and analyst ratings on TipRanks)