One Factor Bringing NVIDIA (NVDA) Stock Up Today

NEW YORK (TheStreet) -- Shares of NVIDIA (NVDA) were gaining 1.6% to $21.81 Thursday after the chipmaker announced it will acquire TransGaming's cross-platform portability technology.

NVIDIA will pay $3.75 million for the technology which is currently part of TransGaming's Graphics and Portability Group, and includes Cider, which helps game developers port PC games to Apples's (AAPL) Mac OS X. The deal does not include TransGaming's SwiftShader, its 3D rendering technology.

Following the deal NVIDIA will open an office in Toronto, its first in Canada, which will be staffed with about 15 employees from TransGaming.

TransGaming will become an NVIDIA GRID preferred partner as part of the deal, and will use the chipmaker's cloud gaming technology in its GameTree TV service.

About 2.9 million shares of NVIDIA were traded by 11:58 a.m. Thursday, compared to the company's average trading volume of about 8.1 million shares a day.

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, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

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

  • NVDA's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 4.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The current debt-to-equity ratio, 0.31, 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 5.94, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 62.89% to $246.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 19.77%.
  • The gross profit margin for NVIDIA CORP is rather high; currently it is at 61.42%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 11.64% trails the industry average.
  • You can view the full analysis from the report here: NVDA Ratings Report

More from Markets

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Oil Slumps, Gas Spikes Ahead of Holiday Weekend; Assessing the Chipmakers--ICYMI

Oil Slumps, Gas Spikes Ahead of Holiday Weekend; Assessing the Chipmakers--ICYMI

Week Ahead: Wall Street Looks to Jobs Report as North Korea Meeting Less Certain

Week Ahead: Wall Street Looks to Jobs Report as North Korea Meeting Less Certain

Dow and S&P 500 Decline, Energy Shares Fall as U.S. Crude Oil Slides 4%

Dow and S&P 500 Decline, Energy Shares Fall as U.S. Crude Oil Slides 4%