Needham & Company LLC Reiterates Sell Rating for NVIDIA (NVDA)
“Yesterday, NVDA announced an all-cash offer of $125/ share to acquire MLNX. The price equates to an enterprise value of $6.9BN or ~6.3x 2018 sales. The deal accounts for over 90% of NVDA’s $7.4BN of cash and short-term investments. The stock reacted positively on the news, up 7% on the day, which we found surprising given the unusual size of the transaction (NVDA has not made an acquisition of this magnitude in recent history) and the timing (following a negative pre-announcement). Nonetheless, we expect the deal will be immediately accretive to the financials assuming no synergies (revenue or cost) and see it helping to expand the company into the Infiniband and Ethernet markets. We do wonder though about the strategic synergies of the deal as the two companies sell vastly different products into the data center.”,” Needham & Company LLC’s analyst wrote.
A number of other research firms also recently issued reports on NVDA. SunTrust Banks cut their target price on shares of NVIDIA to $237.00 and set a buy rating for the company in a research report on Friday, November 16th. Benchmark cut their target price on shares of NVIDIA from $310.00 to $240.00 and set a buy rating for the company in a research report on Friday, November 16th. Goldman Sachs Group downgraded shares of NVIDIA from a conviction-buy rating to a buy rating and cut their target price for the stock from $283.00 to $200.00 in a research report on Friday, November 16th. B. Riley reiterated a neutral rating and issued a $190.00 target price (down previously from $240.00) on shares of NVIDIA in a research report on Friday, November 16th. Finally, Royal Bank of Canada cut their target price on shares of NVIDIA to $260.00 and set an outperform rating for the company in a research report on Friday, November 16th. Three equities research analysts have rated the stock with a sell rating, twelve have issued a hold rating and twenty-five have issued a buy rating to the company. The company has an average rating of Buy and a consensus price target of $210.62.
NVIDIA (NASDAQ:NVDA) last released its earnings results on Thursday, February 14th. The computer hardware maker reported $0.80 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.53 by $0.27. NVIDIA had a net margin of 35.35% and a return on equity of 41.78%. The company had revenue of $2.21 billion during the quarter, compared to the consensus estimate of $2.22 billion. During the same quarter in the prior year, the firm earned $1.72 EPS. The company’s revenue was down 24.3% compared to the same quarter last year. On average, research analysts expect that NVIDIA will post 4.49 earnings per share for the current fiscal year.
The company also recently announced a quarterly dividend, which will be paid on Friday, March 22nd. Investors of record on Friday, March 1st will be paid a $0.16 dividend. The ex-dividend date is Thursday, February 28th. This represents a $0.64 dividend on an annualized basis and a yield of 0.39%. NVIDIA’s payout ratio is presently 10.54%.
In related news, EVP Debora Shoquist sold 6,345 shares of the firm’s stock in a transaction on Wednesday, January 2nd. The shares were sold at an average price of $135.33, for a total value of $858,668.85. Following the transaction, the executive vice president now directly owns 177,911 shares in the company, valued at approximately $24,076,695.63. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Company insiders own 4.70% of the company’s stock.
A number of large investors have recently bought and sold shares of the stock. Norges Bank acquired a new position in NVIDIA in the 4th quarter valued at $737,230,000. Actinver Wealth Management Inc. acquired a new position in NVIDIA in the 4th quarter valued at $702,000. Financial Advocates Investment Management grew its stake in NVIDIA by 23.4% in the 4th quarter. Financial Advocates Investment Management now owns 6,044 shares of the computer hardware maker’s stock valued at $807,000 after buying an additional 1,147 shares during the last quarter. Griffin Asset Management Inc. grew its stake in NVIDIA by 47.0% in the 4th quarter. Griffin Asset Management Inc. now owns 3,816 shares of the computer hardware maker’s stock valued at $509,000 after buying an additional 1,220 shares during the last quarter. Finally, Burleson & Company LLC grew its stake in NVIDIA by 589.9% in the 4th quarter. Burleson & Company LLC now owns 22,967 shares of the computer hardware maker’s stock valued at $3,578,000 after buying an additional 19,638 shares during the last quarter. Institutional investors and hedge funds own 68.72% of the company’s stock.
NVIDIA Corporation operates as a visual computing company worldwide. It operates through two segments, GPU and Tegra Processor. The GPU segment offers processors, which include GeForce for PC gaming and mainstream PCs; GeForce NOW for cloud-based game-streaming service; Quadro for design professionals working in computer-aided design, video editing, special effects, and other creative applications; Tesla for AI utilizing deep learning, accelerated computing, and general purpose computing; GRID provides power of NVIDIA graphics through the cloud and datacenters; DGX for AI scientists, researchers, and developers; and cryptocurrency-specific graphics processing units.
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