NVIDIA Corporation's products and services are visual computing platforms that address four markets: Gaming, Enterprise, High Performance Computing & Cloud, and Automotive. The Company operates in two segments: Graphics Processing Unit and Tegra Processor. The company was founded in 1993 and is based in Santa Clara, California.
NVDA Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Nvidia Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Nvidia Corp ranked in the 42th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. The most interesting components of our discounted cash flow analysis for Nvidia Corp ended up being:
As a business, NVDA is generating more cash flow than 92.2% of positive cash flow stocks in the Technology.
The business' balance sheet reveals debt to be 3% of the company's capital (with equity being the remaining amount). Approximately merely 10.16% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
NVDA's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 51.16% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as NVDA, try ACN, DIOD, EXFO, MTSI, and ADI.
The months leading up to the U.S. presidential election in November will be choppy, especially if Democrat Joe Biden extends his poll lead. The EU needs to agree on a $750 billion recovery fund proposal. A wave of foreign money has hit mainland China's markets as the second half of 2020 kicks in.
NVIDIA (NASDAQ: NVDA) stock rocketed 61.5% higher in the first half of 2020 (January through June), according to data from S&P Global Market Intelligence. Management issued an upbeat outlook in February, when the company released its results for the fourth quarter of fiscal 2020. The bottom-line performance was even better.