Yahoo Finance Is a Beat Likely for NVIDIA Corporation (NVDA) in Q1 Earnings?
NVIDIA Corporation NVDA is likely to beat expectations when it reports first-quarter fiscal 2024 results after market close on May 24.
For the fiscal first quarter, the company expects revenues of $6.5 billion (+/-2%). The Zacks Consensus Estimate for the same is pegged at $6.51 billion, indicating a 21.5% decline from the year-ago reported figure.
The Zacks Consensus Estimate for quarterly earnings is pegged at 92 cents per share. This suggests a year-over-year decline of 32.4%.
The company’s earnings beat the Zacks Consensus Estimate twice in the preceding four quarters while missing the same on two occasions, the average surprise being -3.2%.
Let’s see how things have shaped up before the announcement.
NVIDIA Corporation Price and EPS Surprise
NVIDIA Corporation price-eps-surprise | NVIDIA Corporation Quote
Factors to Consider
NVIDIA’s first-quarter performance is likely to have benefited from the recovery across its Gaming and Professional Visualization end markets. The Gaming end market’s last quarter results had shown early signs of recovery as inventory with channel partners reached normal levels. The company also registered strong demand across most regions for its gaming products.
Revenues from the Gaming end market increased 16% sequentially in the last reported quarter. NVIDIA’s Professional Visualization segment performance also reflected recovery, with revenues increasing 13% sequentially. We believe that the trend is likely to have continued in the first quarter for both end markets.
Moreover, the continued strength of its Datacenter business on the growing adoption of cloud-based solutions amid the growing hybrid working trend is expected to have boosted NVDA’s first-quarter revenues. An increase in Hyperscale demand and growing adoption in the inference market are likely to have been tailwinds in the to-be-reported quarter.
Further, the company’s Automotive segment showed an improvement in trends in five of the last seven quarters. The positive trend is likely to have continued in the fiscal first quarter, mainly due to increasing investments in self-driving and artificial intelligence cockpit solutions.
However, we opine that ongoing macroeconomic headwinds, like high inflation and interest rates, are likely to have continued to hurt the sales of NVIDIA’s desktop workstation GPUs in the first quarter. Additionally, disruptions in retail channel sales due to travel restrictions and social-distancing measures implemented across several parts of China might have weighed on the overall financial performance in the fiscal first quarter.
Earnings Whispers
Our proven model predicts an earnings beat for NVDA this earnings season. 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, which is the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (94 cents per share) and the Zacks Consensus Estimate (92 cents per share), is +2.43%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: NVIDIA carries a Zacks Rank #3.
Other Stocks With the Favorable Combination
Per our model, HP Inc. HPQ, Agilent A and NetApp NTAP also have the right combination of elements to post an earnings beat in their upcoming releases.
HP is set to report second-quarter fiscal 2023 results on May 30. The company has a Zacks Rank #2 and an Earnings ESP of +2.29% at present. HP’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 1.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for HPQ’s second-quarter earnings is pegged at 76 cents per share, suggesting a decline of 29.6% from the year-ago quarter’s earnings of $1.11. HP’s quarterly revenues are estimated to decrease 20.7% year over year to $13.07 billion.
Agilent carries a Zacks Rank #3 and has an Earnings ESP of +0.40%. The company is scheduled to report second-quarter fiscal 2023 results on May 23. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 7%.
The Zacks Consensus Estimate for Agilent’s second-quarter earnings stands at $1.27 per share, implying a year-over-year increase of 12.4%. It is estimated to report revenues of $1.67 billion, which suggests an increase of approximately 3.8% from the year-ago quarter.
NetApp carries a Zacks Rank #3 and has an Earnings ESP of +0.22%. The company is slated to report fourth-quarter fiscal 2025 results on May 31. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 9%.
The Zacks Consensus Estimate for NTAP’s fourth-quarter earnings is pegged at $1.35 per share, indicating a year-over-year decline of 4.9%. The consensus mark for revenues stands at $1.55 billion, suggesting a year-over-year drop of 7.8%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
HP Inc. (HPQ) : Free Stock Analysis Report
NetApp, Inc. (NTAP) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Agilent Technologies, Inc. (A) : Free Stock Analysis Report
