NVIDIA Shares Tumble Despite 2Q Earnings Beat; Roth Capital Raises Price Target

After NVIDIA Corporation (NASDAQ:NVDA) released its fiscal second-quarter earnings last night, many investors are scratching their heads. While the semiconductor giant reported a strong revenue and EPS of $2.23 billion and $0.92, well above consensus estimates of $1.96 and $0.70, shares are falling nearly 5% in Friday’s trading session.

Roth Capital analyst Brian Alger commented, “NVDA’s performance over the past several quarters has been nearly flawless, and it is clear that neither Intel nor AMD have been successful in slowing the company’s growth. With mega trends like eSports, Artificial Intelligence, High Performance Computing, Cryptocurrencies and Autonomous Driving, Nvidia stands alone among semiconductor companies in terms of big volume/dollar growth potential, in our view.”

“While the exceptional growth can’t mathematically last forever, we fail to identify an competitive threat that is likely to impede Nvidia over the next several quarters. As such we are raising our FY:19 revenue estimate by roughly $1 billion, thus driving the out year EPS up from $3.37 to $4.52,” the analyst added.

As such, Alger raises his price target on NVDA to $150 (from $120). However, at current levels and with limited upside, Alger maintains a Neutral rating on the stock. (To watch Alger’s track record, click here)

Out of the 24 analysts polled in the past 3 months, 16 rate Nvidia stock a Buy, 6 rate the stock a Hold and 3 recommend a Sell. With a slight downside potential of 3%, the stock’s consensus target price stands at $159.71.

 

Snap Shares Dive on Light 2Q17 Results; Jefferies Slashes Price Target

Snap Inc (NYSE:SNAP) shares are taking a beating today, after the social media giant reported second-quarter results that were generally below consensus, with slowing DAU growth and lower monetization than expected.

In reaction, Jefferies’ top analyst Brian Fitzgerald slashed his price target to $16.00 (from $30), while reiterating a Buy rating on the stock.

Fitzgerald opined, “2nd quarter in a row with miss quarter (on no guide). Pricing in the near-term will be weak as they use pricing as a lever to continue to on board additional advertisers to build out robust demand for Snap Ads. Additionally, Snap will face pressure from employees being able to sell shares for the first time since IPO (although co-founders Spiegel & Murphy noted they would not sell their ~422MM shares this year). Lastly, we feel that SNAP’s unwillingness to provide Street guidance will continue to be a disservice to shareholders as estimates continue to fluctuate wildly and it introduces unneeded uncertainty into results (even an overly conservative guidance would be appreciated).”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brian Fitzgerald has a yearly average return of 22.9% and a 76.8% success rate. Fitzgerald has a -33.4% average return when recommending SNAP, and is ranked #15 out of 4628 analysts.

Out of the 40 analysts polled in the past 12 months, 11 rate Snap stock a Buy, 21 rate the stock a Hold and 8 recommend Sell. With a return potential of 39.6%, the stock’s consensus target price stands at $19.22.