Needham & Company Maintains a 'Hold' on NVIDIA (NVDA); Lowering Estimates on Soft GPU Business and Potential Tegra Overbuild
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Price: $225.16 -0.06%
Rating Summary:
58 Buy, 10 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
58 Buy, 10 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Needham & Company maintains a 'Hold' on NVIDIA (NASDAQ: NVDA).
Needham analyst says, "We are lowering our estimates on NVDA due to our reduced expectations for core GPU revenues and a potential Tegra overbuild. While F2Q (July) is back-end loaded (50%+ sales in July), we believe NVDA is tracking below plan. Based on our detailed Tegra bottom-up model, we have lowered our forecast to $480MM (vs. $530MM). We think there are at least 3MM excess units of Tegra processors that have not sold through. Meanwhile, the core discrete GPU biz is experiencing end demand weakness in China (65% of GPU sales; 35% of total sales) and Europe (15% of GPU sales; 10% of total sales). In addition, Intel’s (Nasdaq: INTC) Sanybridge platform as well the expected ramp of AMD's (NYSE: AMD) (N/R) APU Llano is taking some share in discrete GPUs. While NVDA has several interesting new markets, such as mobile computing, PC and data center, we believe there are risks to its core GPU (56% of sales) and workstation (21% of sales) segments. Moreover, a potential slowdown in the Tegra ramp could cause NVDA’s valuation multiple to compress...We are lowering our FY12 estimates to $3.97BN/$1.00 (vs. $4.05BN/$1.05. Our FY13 estimates of $4.3BN/$1.15 remain unchanged."
For more ratings news on NVIDIA click here and for the rating history of NVIDIA click here.
Shares of NVIDIA closed at $16.19 yesterday.
Needham analyst says, "We are lowering our estimates on NVDA due to our reduced expectations for core GPU revenues and a potential Tegra overbuild. While F2Q (July) is back-end loaded (50%+ sales in July), we believe NVDA is tracking below plan. Based on our detailed Tegra bottom-up model, we have lowered our forecast to $480MM (vs. $530MM). We think there are at least 3MM excess units of Tegra processors that have not sold through. Meanwhile, the core discrete GPU biz is experiencing end demand weakness in China (65% of GPU sales; 35% of total sales) and Europe (15% of GPU sales; 10% of total sales). In addition, Intel’s (Nasdaq: INTC) Sanybridge platform as well the expected ramp of AMD's (NYSE: AMD) (N/R) APU Llano is taking some share in discrete GPUs. While NVDA has several interesting new markets, such as mobile computing, PC and data center, we believe there are risks to its core GPU (56% of sales) and workstation (21% of sales) segments. Moreover, a potential slowdown in the Tegra ramp could cause NVDA’s valuation multiple to compress...We are lowering our FY12 estimates to $3.97BN/$1.00 (vs. $4.05BN/$1.05. Our FY13 estimates of $4.3BN/$1.15 remain unchanged."
For more ratings news on NVIDIA click here and for the rating history of NVIDIA click here.
Shares of NVIDIA closed at $16.19 yesterday.
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