NVIDIA (NVDA) Stock Analysis: Fair Valuation and Mixed SignalsStockInvest.us, 2 months ago
NVIDIA Corporation (NVDA), a leading company in the technology sector listed on NASDAQ, saw a last close price of $447.82 on October 02, 2023, signaling an increase of 2.95%. The trading day observed a high and low price of $451.75 and $438.61, respectively. The company boasts a substantial market capitalization of $1.10 trillion, with a trading volume of 42.45 million shares, slightly less than its average volume of 49.07 million. The firm has an outstanding number of 2.48 billion shares.
NVDA’s year-to-date performance reveals a highest and lowest price of $502.66 and $108.13, respectively. The firm's earnings per share (EPS) stands at $1.93, creating a high price to earnings (PE) ratio of 232.03. The company has slated its earnings announcement for November 15, 2023.
Diving into NVIDIA's technical indicators, the 14-day Relative Strength Index (RSI) shows a neutral position at 50. The 50-day moving average stands at $449.35, slightly above the last closing price, signaling that the stock could be trending slightly downwards. The 200-day moving average at $321.44 demonstrates a significant uptrend in the longer term.
The fall in the 3-month MACD (Moving Average Convergence Divergence) to a negative value of -17.95 is somewhat determinant of a bearish market movement.
Additionally, the average true range (ATR) value is 3.34, projecting robust intraday volatility. The stop-loss and support for the stock are $429.91 and $443.09 respectively, whereas the resistance level stands at $454.69.
The company's substantial market capitalization of $1.10 trillion confirms its strength and dominance in the market. Despite the high PE ratio of 232.03, suggesting overvaluation, the rising EPS of $1.93 indicates strong profitability.
Furthermore, recent news about NVIDIA is positive. Goldman Sachs' inclusion of NVDA in its 'Conviction Buy' list reflects a favourable market sentiment, predicting its potential to outperform.
Looking at analyst predictions, NVDA has a consensus rating of "Buy," with 36 analysts recommending a "Buy," two suggesting a "Hold," and one advising a "Sell." The consensus target price is $358.19, with a high and low forecast of $800 and $133, respectively.
Discounted Cash Flow (DCF) Analysis
The DCF analysis assigns a value of $449.17 to the NVDA stock, which is closely aligned to the last closing price of $447.82, insinuating fair valuation.
Short-Term Future Predictions
Given the data, it's projected that the stock price for the next trading day, October 03, 2023, might converge around the DCF value of $449.20, considering the close price of $447.82, the neutral RSI, and the average moving value.
Long-Term Future Predictions
Over the next week, maintaining a neutral stance, there may be a slight inclination towards an upward trend, as suggested by the 200-day moving average and the positive market sentiment based on recent news. However, the high PE ratio and negative MACD indicate the potential for a downturn intersecting this positive trend.
NVDA can be categorized as a 'Hold' for the near term, given the fairly valued DCF analysis, neutral RSI, and positive 200-day moving average. However, bearish indicators such as the high PE ratio, slightly bearish 50-day moving average, negative MACD, and the close proximity of closing price to resistance level render buying the stock a risky move. Long-term investors may consider 'Buy' opportunities on price dips, encouraged by the positive news coverage and the substantial majority of analysts recommending a 'Buy'.