NVIDIA Corporations (NVDA) is one of those stocks that seem to be doing well right now. We can say this because they saw a rise in their numbers by about three percent recently. They have reported earnings for the quarter, and we will be taking an in-depth look at some of their financial reports. These include their revenue reports, profit reports, and balance sheet. The NVDA stocks are currently selling at above five hundred dollars per share. We will be discussing what you should probably do with your NVDA stocks, whether to sell off or to strengthen your position. Over the past year, the NVDA stocks have risen by just over ninety percent, have a three hundred and fifty billion dollar market cap, and have a small dividend pay. NVDA EPS currently beats on revenue by about less than a dollar, and it is expected that their revenue projections are expected to reach more than five billion soon.
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Without wasting any more time, let us discuss further the topic at hand.
NVDA Stock Analysis
On January 31, 2021, they made revenues of about five billion dollars. This wasn’t so bad but they hadn’t reached their projected revenue estimate of 5.3 billion dollars. There may be other chip makers in the world today, but somehow NVDA is always premium priced. These chip-making companies try to increase revenue in different ways, some float money on the balance sheets, others pay higher dividends, but the aim is to make money.
Comparing price to sales among these chip-making companies, you will see that NVDA tends to stand out amongst them. NVDA is trading at 23 times sales. AMD is trading at ten times sales, while INTC is trading at about three times sales. QCOM comes in at about 5 times sales, and TSM is at about twelve times sales. So, if you are buying NVDA stocks, be sure to remember that it has always traded at a premium.
So, why does it trade at a premium? Well, this is because they are in some of the top sectors in the market today. NVDA is into gaming (which has seen a surge since the pandemic), auto, Datacenter, professional visualization, and OEM & others. Some of these numbers have seen triple their value over six to seven quarters. For example, the data center was at about six hundred million dollars in Q1 FY20. By Q4 FY21, the numbers have risen to almost two billion. Gaming, another instance, saw about one billion in Q1 FY2o. By q$ FY21, the numbers doubled to almost two and a half billion. Other sectors have also seen significant increments, so this is one of the main reasons NVDA stocks are premium priced. In fact, checking the total increase, the numbers are staggering. In Q1 FY20, the total revenue was a little above two billion. Fast forward to Q4 FY21, the revenue numbers are now over five billion.
Let’s look at it from another angle. Their revenue in the past year for three months, the revenue numbers went from more than three billion to over five billion dollars. But, the cost of revenue barely moved from 1.090 billion to about 1.846 billion. When you compare this slight increase in the cost of revenue to the increase in revenue, it is quite a wonder. This caused a gross profit increase of about one billion dollars. Also, notice that the total operating expenses did not go up that much, but the income from operations was good. One interesting thing about these numbers over a three-month period is that the revenues are more than these numbers on a cash basis.
From the perspective of a balance sheet, everything looks great. Over the last year, their cash, marketable securities, and cash equivalents went up by almost a billion, and their numbers for inventories also doubled over the past year.
For the short-term debt, there are about a billion dollars to be settled. While the long-term debt is not looking so good over the past year, rising from two billion to almost six billion dollars. Even total liabilities went up from five to about eleven billion over the past year. However, considering the positive numbers they have, and the projections they are expecting in the foreseeable future, the balance sheet does not look all that bad. So, we can agree that NVDA stocks are doing well in the short and long run.
The company is having a great quarter and is gathering enough momentum behind its products. Like we said earlier, its revenue expectations are set to reach about 5.3 billion dollars.
So, NVDA stocks might just be the kind of stocks you buy when you notice a slight dip or hold on to if you already have a position there. With all the numbers and projections, NVDA stocks are good to go.
There is no telling what will happen in the stock market, considering the level of volatility going on. But, one thing is sure, you need to at least try to study the market and make the right analysis and assumptions to better your chances of higher revenue. Take a look at the income statements, balance sheets, cash flow statements, future projections, and all. If you liked this blog, please endeavor to like and share it with others. Also, do not forget to subscribe to my channel, join my Facebook page, and drop your views and comments in the comment box below.
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- Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage
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- How to Day Trade for a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology
- A Beginner’s Guide to the Stock Market: Everything You Need to Start Making Money Today
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