Earnings Preview: NVIDIA (NVDA)

After the market closes today, we will get earnings out of NVIDIA Corp. (NASDAQ:NVDA).  First Call estimates are $0.43 EPS and $859.9 million in revenues.  Next quarter estimates are $0.49 EPS & $939 million revenues and fiscal JAN-2008 estimates are $1.86 EPS & $3.64 Billion revenues.

The company did previously guide for flat to slightly higher revenues for the July-end quarter, and for whatever it’s worth this last quarter is the company’s seasonal low-point year in and year out.  Based on this being the throw away quarter, investors will likely be looking ahead rather than in the rear view mirror.

The internals on NVIDIA are strong, with the stock up over 3% this morning ahead of earnings and on a day where the broad market is weak.  Shares today have gotten within $1.00 of the 52-week highs, which is also all-time highs.  Analysts average price targets are actually right around the current stock price as shares have outperformed and achieved many price targets.  There are still some buy/outperform targets north of $50.00.  Options are a bit hard to read today with the market in flux and with the stock up this much, but on a static snapshot basis at 10:30 it looks like options traders would be valuing today’s expected move of up to $3.00 in either direction.

Perhaps the most interesting comparison will be the company’s comparisons to AMD’s ATI unit, particularly since NVIDIA has enjoyed such a strong lead of late.  NVIDIA’s short interest in July was listed as 22.855 million shares and that was up from 20.787 million in June.  We’ll also get to see an update as to how many shares it is really repurchasing in its $1 Billion+ buyback plan, as the need to offset employee option dilution may be less with shares gaining so much.

Jon C. Ogg
August 9, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.