Nvidia Corporation (NASDAQ: NVDA) has confirmed the release date for its Q4 2021 earnings report, which will be on Wednesday, February 16, 2022, before the market opens.
What to look for: The ongoing strength in the data centre business following increased adoption of cloud-based solutions in the wake of pandemic induced remote working trend is expected to boost Q4 revenues. Also, the increase in hyper-scale demand and growing adoption in the inference market will act as tailwinds for the quarter under review. In addition, the company's growth opportunities in high-performance computing, ray-traced gaming and AI were driving factors for Q4 2021 growth. Equally, a series of blockbuster AAA titles that pledged support for the company's RTX ray racing tech could also be a catalyst for results.
Earnings: Stockearning’s estimated EPS for Q4 2021 is expected to be $1.22 per share, representing YoY growth of 56.4%. The company produced an earnings surprise of 6.32% in the last quarter, with actual earnings of $1.01 per share. Historical EPS performance shows that in the past 12 quarters, the company has topped EPS estimates 32 times (88%), met twice (5%) and missed twice (5%).
Revenue: Fourth-quarter revenue is expected to be around $7.43 billion suggesting a YoY increase of 48.5 %. In the third quarter, the company had revenue of $7.1 billion, a YoY increase of 50% with data centre revenue of $2.94 billion and gaming revenue of $3.22 billion, representing a YoY increase of 55% and 42%, respectively.
Stock Movement: NVDA 1shares have dropped 18.2% since the company released its third-quarter earnings. Interestingly, NVDA shares have been UP 28 times out of the past 47 quarters. So, the historical price reaction suggests a 59% probability of the share price going UP following the fiscal Q4 2021 earnings release. According to the Stockearning algorithm, the predicted first-day move is +/-6%, while the predicted move on the seventh day is +/-9%.
What analysts are saying: Citi analyst Atif Malik has a price target of $350 on Nvidia with a Buy rating despite the company terminating its anticipated purchase of SoftBank's ARM because of various regulatory challenges to finalizing the transaction. Malik told investors that the merger was widely expected to fail to gain regulatory approval in a research note. According to the analyst, SoftBank will keep the $1.25 billion prepaid by the company, and Nvidia will keep its 20-year Arm license. Nvidia aims to record a $1.36 billion charge in the first quarter of the fiscal year 2023, including the $1.25 billion prepayments supplied upon signing, according to Malik, who also mentions that Nvidia plans to debut Grace, its computer processing division, in 2023. The analyst claims that the company can pursue this plan with the twenty-year ARM license without controlling Arm.
BofA analyst Vivek Arya reiterated a Buy rating on the stock with a price target of $375. Vivek has confidence regarding momentum ahead of 2022 in the data centre, gaming and the autos opportunities/nascent omniverse. Capacity is still a bottleneck, as demand surpasses supply throughout 2021, particularly in gaming. However, according to Arya's research note to investors, management stated that they are striving o secure supply and expect limitations to ease in 2H 2022. According to the analyst, Nvidia is a top computing selection. He believes it is better placed to address some of the most critical, multi-decade secular growth prospects.
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