NVIDIA Corporation Stock Hold Recommendation Reiterated (NVDA)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- NVIDIA Corporation (Nasdaq:NVDA) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+ . The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.

• ACTIVE STOCK TRADERS: Check out TheStreet's special offer for Real Money, headlined by Jim Cramer, now!

Highlights from the ratings report include:

• NVDA's revenue growth trails the industry average of 14.3%. Since the same quarter one year prior, revenues slightly increased by 2.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
• NVDA's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.64, which clearly demonstrates the ability to cover short-term cash needs.
• Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
• The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Semiconductors & Semiconductor Equipment industry. The net income has decreased by 21.4% when compared to the same quarter one year ago, dropping from $151.57 million to $119.05 million.
• The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, NVIDIA CORP's return on equity is below that of both the industry average and the S&P 500.

NVIDIA Corporation provides graphics chips for use in smartphones, personal computers (PC), tablets, and professional workstations markets worldwide. It operates in three segments: Graphic Processing Unit (GPU), Professional Solutions Business (PSB), and Consumer Products Business (CPB). The company has a P/E ratio of 18.7, above the average electronics industry P/E ratio of 17.4 and above the S&P 500 P/E ratio of 17.7. NVIDIA has a market cap of $8.81 billion and is part of the technology sector and electronics industry. Shares are up 4.5% year to date as of the close of trading on Friday.

You can view the full NVIDIA Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

For more information on NVIDIA Corporation click any of the following:

• NVIDIA Corporation Stock Price

• NVIDIA Corporation Analyst Ratings

• NVIDIA Corporation Key Stats & Profile

• NVIDIA Corporation Earnings

• NVIDIA Corporation Ratio Comparison

• NVIDIA Corporation Growth Rates

• NVIDIA Corporation Balance Sheet

• NVIDIA Corporation Cash Flow

• NVIDIA Corporation Income Statement