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NASDAQ:NVDA: a strong growth stock preparing for the next leg up?.

By Mill Chart

Last update: May 14, 2024

For growth-minded investors, high revenue and EPS growth are key criteria. Today, we'll examine whether NVIDIA CORP (NASDAQ:NVDA) fits the bill for growth investing, particularly as it forms a base and hints at a potential breakout. Remember, due diligence is essential, but NVIDIA CORP has caught our attention on our screen for growth with base formation. It may warrant additional investigation.

Understanding NASDAQ:NVDA's Growth Score

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:NVDA, the assigned 9 reflects its growth potential:

  • The Earnings Per Share has grown by an impressive 289.49% over the past year.
  • NVDA shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 50.90% yearly.
  • NVDA shows a strong growth in Revenue. In the last year, the Revenue has grown by 125.85%.
  • NVDA shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 39.06% yearly.
  • NVDA is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 28.56% yearly.
  • Based on estimates for the next years, NVDA will show a very strong growth in Revenue. The Revenue will grow by 27.79% on average per year.

What does the Health looks like for NASDAQ:NVDA

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:NVDA has received a 8 out of 10:

  • An Altman-Z score of 63.09 indicates that NVDA is not in any danger for bankruptcy at the moment.
  • Looking at the Altman-Z score, with a value of 63.09, NVDA belongs to the top of the industry, outperforming 98.11% of the companies in the same industry.
  • NVDA has a debt to FCF ratio of 0.36. This is a very positive value and a sign of high solvency as it would only need 0.36 years to pay back of all of its debts.
  • Looking at the Debt to FCF ratio, with a value of 0.36, NVDA belongs to the top of the industry, outperforming 80.19% of the companies in the same industry.
  • A Debt/Equity ratio of 0.20 indicates that NVDA is not too dependend on debt financing.
  • A Current Ratio of 4.17 indicates that NVDA has no problem at all paying its short term obligations.
  • NVDA has a better Current ratio (4.17) than 68.87% of its industry peers.
  • A Quick Ratio of 3.67 indicates that NVDA has no problem at all paying its short term obligations.
  • NVDA has a Quick ratio of 3.67. This is in the better half of the industry: NVDA outperforms 67.92% of its industry peers.

Looking at the Profitability

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:NVDA was assigned a score of 10 for profitability:

  • NVDA has a Return On Assets of 45.28%. This is amongst the best in the industry. NVDA outperforms 100.00% of its industry peers.
  • NVDA has a Return On Equity of 69.24%. This is amongst the best in the industry. NVDA outperforms 98.11% of its industry peers.
  • NVDA's Return On Invested Capital of 52.66% is amongst the best of the industry. NVDA outperforms 100.00% of its industry peers.
  • The Average Return On Invested Capital over the past 3 years for NVDA is significantly above the industry average of 10.36%.
  • The 3 year average ROIC (31.07%) for NVDA is below the current ROIC(52.66%), indicating increased profibility in the last year.
  • With an excellent Profit Margin value of 48.85%, NVDA belongs to the best of the industry, outperforming 98.11% of the companies in the same industry.
  • NVDA's Profit Margin has improved in the last couple of years.
  • NVDA has a better Operating Margin (54.12%) than 99.06% of its industry peers.
  • In the last couple of years the Operating Margin of NVDA has grown nicely.
  • With an excellent Gross Margin value of 72.72%, NVDA belongs to the best of the industry, outperforming 92.45% of the companies in the same industry.
  • In the last couple of years the Gross Margin of NVDA has grown nicely.

Looking at the Setup

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NASDAQ:NVDA this score is currently 7:

Besides having an excellent technical rating, NVDA also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. There is very little resistance above the current price. There is a support zone below the current price at 887.46, a Stop Loss order could be placed below this zone.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

Our latest full fundamental report of NVDA contains the most current fundamental analsysis.

For an up to date full technical analysis you can check the technical report of NVDA

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.

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NVIDIA CORP

NASDAQ:NVDA (5/29/2024, 7:21:01 PM)

Premarket: 1138.97 -9.28 (-0.81%)

1148.25

+9.24 (+0.81%)

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