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NVIDIA (NVDA) to Post Q4 Earnings: What's in the Cards?

Zacks Equity Research
·3-min read

NVIDIA NVDA is slated to release fourth-quarter fiscal 2020 results on Feb 13.

For the fiscal fourth quarter, the company expects revenues of $2.95 billion (+/-2%). The Zacks Consensus Estimate is pegged at $2.96 billion, indicating a rise of 34.2% from the year-ago quarter’s reported figure.

The Zacks Consensus Estimate for earnings stands at $1.66, suggesting an improvement of 107.5% from the year-earlier reported number.

The company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the surprise being 8.8%, on average.

NVIDIA Corporation Price and EPS Surprise

NVIDIA Corporation Price and EPS Surprise
NVIDIA Corporation Price and EPS Surprise

NVIDIA Corporation price-eps-surprise | NVIDIA Corporation Quote

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Let’s see how things have shaped up for the announcement.

Factors at Play

NIVIDIA’s fourth-quarter fiscal 2020 performance is likely to have benefited from growth across all its business segments. The company’s growth opportunities in ray-traced gaming, rendering, high-performance computing, AI and self-driving cars are likely to have remained a tailwind.

A spate of blockbuster AAA titles, which pledged support for NVIDIA RTX ray tracing technology, is likely to have been a positive. In third-quarter fiscal 2020, NVIDIA announced that Microsoft’s Minecraft game will feature the technology. Further, the recently released GeForce RTX SUPER GPUs are expected to have strengthened its leadership in the high end of the market.

Moreover, recovery in Data Center business is expected to have been a key growth driver this earnings season. Increase in Hyperscale demand and growing adoption in the inference market are upsides.

Furthermore, the solid uptake of AI-based smart cockpit infotainment solutions is likely to have boosted the Automotive business. Additionally, strength across mobile workstation products is expected to have aided Professional Visualization revenues.

Besides, persistent improvement in gaming mix is likely to have boosted gross margins.

However, seasonal softness in notebooks and Switch gaming consoles is likely to have been a downside this earnings season.

Further, macroeconomic perils, given the highly volatile trade environment, persist as a key concern.

What Our Model Says

Our proven Zacks model does not predict an earnings beat for NVIDIA this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

NVIDIA has a Zacks Rank of 3 and an Earnings ESP of 0.00%.

Stocks to Consider

Here are some stocks worth considering as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Applied Materials, Inc. AMAT has an Earnings ESP of +2.89% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alteryx, Inc. AYX has an Earnings ESP of +6.49% and is Zacks #1 Ranked.

Bandwidth Inc. BAND has an Earnings ESP of +2.99% and is Zacks #2 Ranked.

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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
 
Applied Materials, Inc. (AMAT) : Free Stock Analysis Report
 
Alteryx, Inc. (AYX) : Free Stock Analysis Report
 
Bandwidth Inc. (BAND) : Free Stock Analysis Report
 
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