NVIDIA (NVDA) PT Lifted to $90 at UBS; Still Early Innings of Growth
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UBS analyst Stephen Chin reiterated a Buy rating and boosted his price target on NVIDIA (NASDAQ: NVDA) to $90.00 (from $71.00), saying data center results suggest NVDA is still in the early innings of growth
Chin commented, "was 26% higher than our estimate. We keep a Buy rating as we materially raise estimates on the solid execution in data center sales and gaming sales. NVDA's data center revenues were $240M and much higher than our estimate of $166M and consensus at $170M. We believe the stock will continue to move higher if NVDA continues to execute in machine learning and approaches a sales run rate of $2B next year (up 2x yoy). One trend we would like to see improve next year is its net income to FCF conversion. Typically this averaged 1 to 1 but in FY17 we estimate net income of $1.8B and FCF of $1.3B so its EV/FCF multiple is high, at around 30x. We estimate this will improve next year as its inventory and receivables have grown near term as it ramps new product sales and customer design wins."
Shares of NVIDIA closed at $67.77 yesterday.
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