Nvidia (NVDA) Stock Sinks Despite MKM Partners' Bullish Comments

Nvidia (NVDA) shares are sinking on Monday despite MKM Partners issuing positive comments on the visual computing company, upgrading shares to 'buy' from 'neutral.'
By U-Jin Lee ,

NEW YORK (TheStreet) -- Nvidia Corp. (NVDA) - Get Report  shares are sinking 0.98% to $31.24 on Monday despite MKM Partners issuing positive comments on the visual computing company, and upgrading shares to "buy" from "neutral" with a $46 price target, according to Barron's.com.

Even though the stock is costly, "opportunities have never been greater," analysts said.

The firm sees a sustainable growth trajectory and believes that changes to paradigms of its automotive, gaming and data center exposure could combat future headwinds, Barron's.com noted.

Furthermore, analysts are bullish as the company on Thursday after the market closed reported strong third quarter 2015 earnings of 46 cents a share on revenue of $1.31 billion.

These results beat analysts' estimates of 25 cents a share on revenue of $1.18 billion. 

Separately, TheStreet Ratings team rates NVIDIA CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

We rate NVIDIA CORP (NVDA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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, reasonable valuation levels, solid stock price performance and increase in net income. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 11.0%. Since the same quarter one year prior, revenues slightly increased by 6.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 6.16, which clearly demonstrates the ability to cover short-term cash needs.
  • Powered by its strong earnings growth of 41.93% and other important driving factors, this stock has surged by 37.65% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NVDA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 42.2% when compared to the same quarter one year prior, rising from $172.97 million to $246.00 million.
  • You can view the full analysis from the report here: NVDA
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