Susquehanna Remains Sidelined on NVIDIA (NVDA) Following 4Q Beat

Susquehanna reiterated a Neutral rating on NVIDIA (NASDAQ: NVDA), and raised the price target to $26.00 (from $25.00), following the company's 4Q earnings report. NVDA reported revenue of $1.4 bln, up 7% Q/Q, ahead of consensus of $1.31 bln. Growth was driven by GPUs for gaming, professional visualization, data center, as well as Tegra automotive systems. PF EPS of $0.52 was ahead of $0.43 estimates.

Analyst Chris
Caso commented, "NVDA provided a solid report amidst the macro uncertainty, posting slight upside to expectations, with strength being fairly broad-based. The company guided for revenue to be down 10% Q/Q in the April quarter, which results in slight upside to consensus given the January upside. Going forward, a near-term question will be the extent to which NVDA's new Pascal product cycle has on 2H revenue. Longer term, we consider the stock performance to be a matter of whether the company’s targeted growth segments (auto, virtual reality, artificial intelligence), which are currently small, will be able to drive growth in the years to come. In the meantime, with the stock trading at a 7% free cash flow yield off our F18 estimates (excluding INTC royalties and their $6/share in net cash), we feel the stock is fairly valued until those emerging growth drivers emerge."

For an analyst ratings summary and ratings history on NVIDIA click here. For more ratings news on NVIDIA click here.

Shares of NVIDIA closed at $27.66 yesterday.

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