NVDA stock is hovering around its 52-week high this week as investors are awaiting third-quarter earnings from NVIDIA Corporation (NASDAQ:NVDA) tomorrow.
Key Metrics to Watch
The earnings season is now in full swing, and every other day, big-ticket companies are publishing their quarterly financial results. One of the most highly anticipated quarterly earnings this week is that of graphic processing unit (GPU) manufacturing giant NVIDIA. There is definite optimism among investors, considering the fact that in the second quarter, NVIDIA managed to beat market expectations comfortably.
After the publication of its Q2 2019 results, NVDA stock went up over 7% the next day, and hence, it is understandable that there is a lot of anticipation with regards to the Q3 earnings.
That being said, it should be noted that the company was in a slump in Q4 2018, and in the previous quarter, its revenues dropped by 17% year-on-year. On top of that, the earnings per share experienced a slump of 36% to $1.24.
Market watchers will certainly be expecting a slowdown in the year-on-year decline in revenue and in earnings per share. It should be noted that the company surpassed expectations in the previous quarter, and it is hardly surprising that a repeat is being expected by most analysts.
At the time of writing, NVDA stock is down 0.39% at $208.82.
One of the most closely watched segments in the company’s earnings is going to be its revenue from gaming. It is expected that NVIDIA will suffer a year-on-year decline on that front, but sequential growth is expected to be strong. In the previous quarter, gaming revenue dropped by 27%, and investors will expect it to decline at a lower rate. The data center revenue will also be watched, which previously touched $655 million in the second quarter this year.
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That being said, the most important thing to watch out for in the company’s earnings report is its guidance for Q4 2019. Analysts expect projections of $3.06 billion in revenue and earnings per share of $1.07. That will represent significant growth to the tune of 113% in the case of revenue and 39% for EPS.
NVDA stock has soared over 52% since the beginning of this year.
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