Exploring the Growth Potential of NASDAQ:NVDA as It Nears a Breakout.

Last update: Jul 4, 2024

For growth-minded investors, high revenue and EPS growth are key criteria. Today, we'll examine whether NVIDIA CORP (NASDAQ:NVDA) fits the bill for growth investing, particularly as it forms a base and hints at a potential breakout. Remember, due diligence is essential, but NVIDIA CORP has caught our attention on our screen for growth with base formation. It may warrant additional investigation.

Assessing Growth Metrics for NASDAQ:NVDA

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:NVDA, the assigned 9 reflects its growth potential:

The Earnings Per Share has grown by an impressive 488.24% over the past year.
The Earnings Per Share has been growing by 50.90% on average over the past years. This is a very strong growth
NVDA shows a strong growth in Revenue. In the last year, the Revenue has grown by 208.27%.
NVDA shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 39.06% yearly.
NVDA is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 35.09% yearly.
NVDA is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 32.85% yearly.

Health Examination for NASDAQ:NVDA

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:NVDA has received a 8 out of 10:

NVDA has an Altman-Z score of 72.13. This indicates that NVDA is financially healthy and has little risk of bankruptcy at the moment.
NVDA has a Altman-Z score of 72.13. This is amongst the best in the industry. NVDA outperforms 96.26% of its industry peers.
NVDA has a debt to FCF ratio of 0.25. This is a very positive value and a sign of high solvency as it would only need 0.25 years to pay back of all of its debts.
NVDA has a Debt to FCF ratio of 0.25. This is amongst the best in the industry. NVDA outperforms 83.18% of its industry peers.
A Debt/Equity ratio of 0.17 indicates that NVDA is not too dependend on debt financing.
NVDA has a Current Ratio of 3.53. This indicates that NVDA is financially healthy and has no problem in meeting its short term obligations.
A Quick Ratio of 3.14 indicates that NVDA has no problem at all paying its short term obligations.
NVDA has a Quick ratio of 3.14. This is in the better half of the industry: NVDA outperforms 60.75% of its industry peers.

Profitability Insights: NASDAQ:NVDA

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:NVDA was assigned a score of 10 for profitability:

With an excellent Return On Assets value of 55.27%, NVDA belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
With an excellent Return On Equity value of 86.68%, NVDA belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 67.93%, NVDA belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
NVDA had an Average Return On Invested Capital over the past 3 years of 31.07%. This is significantly above the industry average of 10.82%.
The 3 year average ROIC (31.07%) for NVDA is below the current ROIC(67.93%), indicating increased profibility in the last year.
Looking at the Profit Margin, with a value of 53.40%, NVDA belongs to the top of the industry, outperforming 98.13% of the companies in the same industry.
NVDA's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 59.84%, NVDA belongs to the best of the industry, outperforming 99.07% of the companies in the same industry.
NVDA's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 75.29%, NVDA belongs to the best of the industry, outperforming 94.39% of the companies in the same industry.
In the last couple of years the Gross Margin of NVDA has grown nicely.

Looking at the Setup

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, NASDAQ:NVDA has a 8 as its setup rating, indicating its current consolidation status.

Besides having an excellent technical rating, NVDA also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is very little resistance above the current price. There is a support zone below the current price at 125.55, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for NVDA in the last couple of days, which is a good sign.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

Check the latest full fundamental report of NVDA for a complete fundamental analysis.

For an up to date full technical analysis you can check the technical report of NVDA

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.