NASDAQ:NVDA—Positioned as a High-Growth Stock, Ready for a Potential Breakout.

Last update: Aug 14, 2024

Groth investors are looking for stocks showing high revenue and EPS growth. We will have a look here to see if NVIDIA CORP (NASDAQ:NVDA) is suited for growth investing, while it is forming a base and may be ready to breakout. Investors should of course do their own research, but we spotted NVIDIA CORP showing up in our growth with base formation screen, so it may be worth spending some more time on it.

A Closer Look at Growth for NASDAQ:NVDA

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:NVDA was assigned a score of 9 for growth:

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

Unpacking NASDAQ:NVDA's Health Rating

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:NVDA, the assigned 8 reflects its health status:

NVDA has an Altman-Z score of 61.96. This indicates that NVDA is financially healthy and has little risk of bankruptcy at the moment.
NVDA's Altman-Z score of 61.96 is amongst the best of the industry. NVDA outperforms 99.08% 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 83.49% of its industry peers.
NVDA has a Debt/Equity ratio of 0.17. This is a healthy value indicating a solid balance between debt and equity.
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.
Looking at the Quick ratio, with a value of 3.14, NVDA is in the better half of the industry, outperforming 61.47% of the companies in the same industry.

Looking at the Profitability

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:NVDA scores a 10 out of 10:

NVDA has a better Return On Assets (55.27%) than 100.00% of its industry peers.
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.
The Return On Invested Capital of NVDA (67.93%) is better than 100.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NVDA is significantly above the industry average of 10.74%.
The 3 year average ROIC (31.07%) for NVDA is below the current ROIC(67.93%), indicating increased profibility in the last year.
NVDA has a better Profit Margin (53.40%) than 99.08% of its industry peers.
In the last couple of years the Profit Margin of NVDA has grown nicely.
Looking at the Operating Margin, with a value of 59.84%, NVDA belongs to the top of the industry, outperforming 99.08% of the companies in the same industry.
In the last couple of years the Operating Margin of NVDA has grown nicely.
Looking at the Gross Margin, with a value of 75.29%, NVDA belongs to the top of the industry, outperforming 94.50% of the companies in the same industry.
In the last couple of years the Gross Margin of NVDA has grown nicely.

Why is NASDAQ:NVDA a setup?

ChartMill incorporates a Setup Rating in its analysis, which measures the extent of consolidation in a stock over recent days and weeks. This rating, ranging from 0 to 10, is updated daily and takes into account multiple short-term technical indicators. The current setup rating for NASDAQ:NVDA is 7:

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. We notice that large players showed an interest for NVDA in the last couple of days, which is a good sign.

Every day, new Strong Growth stocks can be found on ChartMill in our Strong Growth screener.

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

Our latest full technical report of NVDA contains the most current technical analsysis.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.