If the stock rises to $245, you would make 33%. For example, 100 share would cost $19,595. The advantage of buying these calls is that you don’t have to shell out $195.92 per share. Also, the all-in cost, after exercising the call options at $221 (i.e, $200 strike plus $21 asking price for the calls), is below even the $245 minimum target price we forecast above. This strike period is after the next earnings release. 16 call options trade at the $200 exercise price trade for $21. Even if it stays flat or declines, it will be a good investment because eventually, the market will likely give it an average P/E multiple.Īnother way to play this is to buy close-to-the-money call options with expiration periods several months ahead. One way to play this is to average into the stock as it keeps rising over the next year. That still puts the stock on a target price of about $245 per share. Granted, its growth may be lower going forward, so perhaps it deserves a lower valuation, say 25% higher. In other words, NVDA stock is worth at least $257.20, 33% higher, if it were to trade at the average P/E multiple of the last five years. That implies that the stock should be worth one-third more than $195. That is significantly lower than what it has historically traded at.įor example, Morningstar reports that Nvidia’s average P/E multiple over the last 5 years has been over 40 times. So, at $195.92 at the time of writing, this puts NVDA stock on a forward price-to-earnings (P/E) forecast of 30 times for 2023. And next year, they forecast another 20% growth to $6.52 per share. Going forward, 39 analysts forecast on average that earnings will rise 22.7% to $5.45 for the year ending Jan. In other words, the market was very pleased with these results and sees the stock as a bargain.
Since the earnings were released on May 25, NVDA is actually up by 15.4% from $169.75. 2, down from the price of $294.11 on Dec. Since the beginning of the year, NVDA stock is down one-third, at $195.92 as of Jun. That sets this stock apart from the rest and makes it worth investigating further to take advantage of its lower price. So, while other tech stocks are reporting lower sales and earnings, Nvidia reported higher sales and net income. Not including those charges, Nvidia’s non-GAAP earnings per share (EPS) were up 49% YOY and even up 3% from the prior quarter. Moreover, its earnings came in higher, as well, making NVDA stock a good bet at today’s price.Įven though GAAP earnings were down 16% year-over-year (YOY), this included one-time charges from the termination of the purchase of semiconductor firm, ARM, in the U.K. This included record revenue from its Data Center and Gaming Divisions.
Revenue came in at $8.29 billion, up 46% from a year ago, and up 8% from the fourth quarter (Q4) of 2021.
Nvidia (NASDAQ: NVDA) reported stellar revenue growth on May 25 for the quarter ending May 1.
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