Noticeable “Technology” Stock described below (Brief Synopsis about NASDAQ:NVDA):-
On Wednesday, Shares of NVIDIA Corporation flaunted 0.52% to reach at $149.95 during previous trading session. The company has experienced volume of 13,560,625 shares while on average the company has a capacity of trading 18.76M share.
NVIDIA Corporation (NASDAQ:NVDA)’s Analysis & Performances to Discover
The Company holds the market capitalization of $90.15B along with 601.20M outstanding shares. Currently the stock price is moving -48.78% off from the highest level of twelve months and +20.48% above from twelve months low. For the stock, price target value has been calculated at $227.18.
NVIDIA Corporation (NASDAQ:NVDA) has shown weekly performance of 13.94%. Its yearly performance remained -35.79%. Year-to-date (YTD) performance of the stock was 12.32%. The stock “NVDA” was trading at a distance of 2.06% from 20 days simple moving average, and its distance from 50 days simple moving average is 2.78% while it has a distance of -32.43% from the 200 days simple moving average. The company has Relative Strength Index (RSI 14) of 52.45 along with Average True Range (ATR 14) of 7.81. Its weekly and monthly volatility is 4.15%, 4.70% respectively. The company’s beta value is at 2.08. Analysts mean recommendation for the stock is 2.00. This number is based on a 1 to 5 scale where 1 indicates a Strong Buy recommendation while 5 represents a Strong Sell.
What is PEG Ratio?
PEG ratio or Price/Earnings-Growth ratio is an attempt to normalize the P/E ratio with the expected earnings growth rate of the company.
The idea behind the PEG ratio for stocks is quite simple:
A low P/E ratio can be justified if the future expected earnings growth is low. A fast growing company on the other hand is able to command a higher price to earnings multiple for its stock. To get more accurate idea of the relative valuation of a company, we need to consider the P/E ratio in conjunction with the future earnings per share growth rate.
WHY IT MATTERS:
The PEG ratio acts as a measure of value that takes into account future growth. Using this metric, investors can gauge whether high-growth stocks may be undervalued, even if they don’t appear so with the more common P/E ratio.
Earnings growth expectations are completely unreliable. Any use of the formula is only as good as the numbers that are fed into it as inputs. Any expected earnings growth in the future is just an expectation, and they vary wildly between different analysts. Even if there is a consensus, the future generally turns out to be different than planned. There is a competitive change, loss of market power, product substitutions, management missteps, etc, that we have no way of knowing today.
Typically P/E ratios are backward looking while the earnings growth rate is a forward looking metric. Future P/E ratio will be different than the one we use today. You could project a future P/E ratio if you wish, but this will introduce further uncertainty in the calculations. Still, many investors are fond of using the concept of Forward P/E and Forward PEG ratio. I strongly advise against this.
Negative PEG Ratio Connotation
A negative PEG ratio does not imply that the stock is a bad investment. It just means that you need to consider other ways of looking at the stock before you can judge if this is a good investment or not.
Is It Overvalued? Look at the PEG Ratio of NVDA
NVIDIA Corporation (NASDAQ:NVDA) currently has a PEG ratio of 1.36 where as its P/E ratio is 20.60. The company’s price to sales ratio for trailing twelve months is 7.26 and price to book ratio for most recent quarter is 9.64, whereas price to cash per share for the most recent quarter is 11.88. NVDA’s price to free cash flow for trailing twelve months is 29.79. Its quick ratio for most recent quarter is 6.20 along with current ratio for most recent quarter of 7.10. Total debt to equity ratio of the company for most recent quarter is 0.21 whereas long term debt to equity ratio for most recent quarter is 0.21. NVIDIA Corporation has a Return on Assets of 38.10%. The company currently has a Return on Equity of 56.10% and Return on Investment of 30.90%.