NVDA

NVIDIA Corporation (NASDAQ:NVDA) reported record revenue for the fourth quarter ended January 31, 2016, of $1.40 billion, up 12 percent from $1.25 billion a year earlier, and up 7 percent from $1.30 billion in the previous quarter.

Revenue for fiscal 2016 was a record $5.01 billion, up 7 percent from $4.68 billion a year earlier.

GAAP earnings per diluted share for the quarter were $0.35, inclusive of a restructuring charge of $0.04 per diluted share. Non-GAAP earnings per diluted share were $0.52, up 21 percent from $0.43 a year earlier and up 13 percent from $0.46 in the previous quarter.

GAAP earnings per diluted share for the full year were $1.08, inclusive of restructuring charges of $0.15 per diluted share. Non-GAAP earnings per diluted share were $1.67, up 18 percent from $1.42 a year earlier.

“We had another record quarter, capping a record year,” said Jen-Hsun Huang, co-founder and chief executive officer, NVIDIA. “Our strategy is to create specialized accelerated computing platforms for large growth markets that demand the 10x boost in performance we offer. Each platform leverages our focused investment in building the world’s most advanced GPU technology.

“NVIDIA is at the center of four exciting growth opportunities — PC gaming, VR, deep learning, and self-driving cars. We are especially excited about deep learning, a breakthrough in artificial intelligence algorithms that takes advantage of our GPU’s ability to process data simultaneously.

“Deep learning is a new computing model that teaches computers to find patterns and make predictions, extracting powerful insights from massive quantities of data. We are working with thousands of companies that are applying the power of deep learning in fields ranging from life sciences and financial services to the Internet of Things,” he said.

Capital Return
During the fourth quarter, NVIDIA paid $62 million in cash dividends and received 4.3 million shares in connection with an accelerated share repurchase agreement that it had entered into in the quarter. During fiscal 2016, the company returned to shareholders $800 million in quarterly cash dividends and share repurchases.

For fiscal 2017, NVIDIA intends to return approximately $1.0 billion to shareholders through ongoing quarterly cash dividends and share repurchases.

NVIDIA will pay its next quarterly cash dividend of $0.115 per share on March 23, 2016, to all shareholders of record on March 2, 2016.

Q4 FY2016 Summary

 
GAAP
($ in millions except earnings per share)   Q4 FY16   Q3 FY16   Q4 FY15   Q/Q   Y/Y
Revenue   $1,401   $1,305   $1,251   up 7%   up 12%
Gross margin   56.5%   56.3%   55.9%   up 20 bps   up 60 bps
Operating expenses   $539   $489   $468   up 10%   up 15%
Operating income   $252   $245   $231   up 3%   up 9%
Net income   $207   $246   $193   down 16%   up 7%
Diluted earnings per share   $0.35   $0.44   $0.35   down 20%  
                     
 
Non-GAAP
($ in millions except earnings per share)   Q4 FY16   Q3 FY16   Q4 FY15   Q/Q   Y/Y
Revenue   $1,401   $1,305   $1,251   up 7%   up 12%
Gross margin   57.2%   56.5%   56.2%   up 70 bps   up 100 bps
Operating expenses   $445   $430   $420   up 3%   up 6%
Operating income   $356   $308   $283   up 16%   up 26%
Net income   $297   $255   $241   up 16%   up 23%
Diluted earnings per share   $0.52   $0.46   $0.43   up 13%   up 21%
                     
 

FY2016 Summary 

GAAP
($ in millions except earnings per share)   FY16   FY15   Y/Y
Revenue   $5,010   $4,682   up 7%
Gross margin   56.1%   55.5%   up 60 bps
Operating expenses   $2,064   $1,840   up 12%
Operating income   $747   $759   down 2%
Net income   $614   $631   down 3%
Diluted earnings per share   $1.08   $1.12   down 4%
             
 
Non-GAAP
($ in millions except earnings per share)   FY16   FY15   Y/Y
Revenue   $5,010   $4,682   up 7%
Gross margin   56.8%   55.8%   up 100 bps
Operating expenses   $1,721   $1,657   up 4%
Operating income   $1,125   $954   up 18%
Net income   $929   $801   up 16%
Diluted earnings per share   $1.67   $1.42   up 18%
             

NVIDIA’s outlook for the first quarter of fiscal 2017 is as follows:

  • Revenue is expected to be $1.26 billion, plus or minus two percent.
  • GAAP and non-GAAP gross margins are expected to be 57.2 percent and 57.5 percent, respectively, plus or minus 50 basis points.
  • GAAP operating expenses are expected to be approximately $500 million. Non-GAAP operating expenses are expected to be approximately $445 million.
  • GAAP and non-GAAP tax rates for the first quarter of fiscal 2017 are both expected to be 19 percent, plus or minus one percent.
  • Capital expenditures are expected to be approximately $35 million to $45 million.

Fourth Quarter Fiscal 2016 Highlights
During the fourth quarter, NVIDIA achieved progress in each of its platforms.

Gaming:

  • Announced the GeForce® GTX VR Ready program — in conjunction with PC companies, notebook makers and add-in card providers – to help users discover systems that will provide great virtual reality experiences.
  • Released NVIDIA GameWorks™ VR, a software development kit for developers of VR software and headsets for gaming.

Professional Visualization:

Datacenter:

  • Introduced an end-to-end hyperscale datacenter deep learning platform — consisting of two accelerators, the NVIDIA Tesla® M40 and NVIDIA Tesla M4 — that lets web-services companies accelerate deep learning workloads.
  • Revealed new breakthroughs from leading web-services groups using NVIDIA GPUs:
    • Facebook is using the NVIDIA Tesla accelerated computing platform to power Big Sur, its next-generation computing system for machine learning applications.
    • Alibaba’s AliCloud cloud computing business is working with NVIDIA to promote China’s first GPU-accelerated, cloud-based, high performance computing platform.
    • IBM is adding support for NVIDIA GPU accelerators to its Watson cognitive computing platform.
    • Google is open-sourcing its TensorFlow deep-learning framework, which can be accelerated on GPUs.
    • Microsoft’s Computational Network Toolkit was integrated with Azure GPU Lab, enabling neural nets for speech recognition that are up to 10x faster than their predecessors.

Auto:

  • Launched NVIDIA DRIVE™ PX 2, a powerful engine for in-vehicle artificial intelligence.
  • Announced that Volvo will use DRIVE PX 2 to power a fleet of 100 Volvo XC90 SUVs that will appear on the road next year in the car manufacturer’s Drive Me autonomous-car pilot program. (Original Source)

Shares of Nvidia jumped nearly 8% in after-hours trading. NVDA has a 1-year high of $33.94 and a 1-year low of $19.09. The stock’s 50-day moving average is $28.60 and its 200-day moving average is $27.34.

On the ratings front, Nvidia has been the subject of a number of recent research reports. In a report released yesterday, Jefferies Co. analyst Mark Lipacis maintained a Buy rating on NVDA, with a price target of $38, which represents a potential upside of 37.4% from where the stock is currently trading. Separately, on January 20, JMP’s Alex Gauna reiterated a Buy rating on the stock and has a price target of $38.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Mark Lipacis and Alex Gauna have a total average return of 9.7% and -2.2% respectively. Lipacis has a success rate of 62.1% and is ranked #132 out of 3610 analysts, while Gauna has a success rate of 45.2% and is ranked #2657.

Overall, one research analyst has rated the stock with a Sell rating, one research analyst has assigned a Hold rating and 4 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $33.00 which is 19.3% above where the stock closed yesterday.

NVIDIA Corp is a visual computing company, connecting people through the powerful medium of computer graphics. The Company’s reporting segments include GPU and Tegra Processor.