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 (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B- . 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, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- NVDA's revenue growth has slightly outpaced the industry average of 4.7%. 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.
- Net operating cash flow has significantly increased by 144.92% to $200.89 million when compared to the same quarter last year. In addition, NVIDIA CORP has also vastly surpassed the industry average cash flow growth rate of -78.88%.
- The gross profit margin for NVIDIA CORP is rather high; currently it is at 51.80%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, NVDA's net profit margin of 11.40% significantly trails the industry average.
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). NVIDIA has a market cap of $7.54 billion and is part of the technology sector and electronics industry. The company has a P/E ratio of 16, below the S&P 500 P/E ratio of 17.7. Shares are down 12.2% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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