Nvidia (NVDA, Financial) stock is falling today following the release of the company's second-quarter earnings results. The share price has dropped by 3.12%, bringing it to $121.685.
Nvidia published Q2 results that significantly outperformed most of Wall Street's targets. The company also issued Q3 guidance that exceeded the average analyst estimate. However, comments from the investor conference call indicated that investors might have to wait longer for the semiconductor specialist's next-generation Blackwell processors, which has contributed to the current stock movement.
Nvidia (NVDA, Financial) recorded non-GAAP (adjusted) earnings of $0.68 per share on revenue of $30 billion in the second quarter, ending July 28. This performance exceeded analyst expectations, which had called for adjusted earnings of $0.64 per share on revenue of $28.7 billion. The company's sales were up 122% year-over-year, and adjusted earnings per share rose 152% compared to the prior-year period.
Looking ahead, Nvidia has guided for revenue of $32.5 billion for the third quarter, surpassing the average Wall Street estimate of $31.7 billion. The company also projected an adjusted gross margin of 75%, suggesting a slight decline in gross margin on a sequential quarterly basis.
Despite the robust Q2 results and promising Q3 guidance, investors are concerned about uncertainties surrounding the launch of Nvidia's Blackwell processors. The company indicated that production of its next-generation chip platform will ramp up in the fourth quarter of this year, hinting at potential delays into 2025.
From a valuation perspective, Nvidia (NVDA, Financial) has a GF Value rating of "Modestly Overvalued," with a GF Value estimate of $103.37. For more detailed valuation metrics, you can visit the GF Value page.
The stock's metrics highlight both strengths and concerns. With a price-to-earnings ratio of 71.2 and a price-to-book ratio of 60.84, Nvidia's valuation metrics are near historical highs. The company has strong financial health, indicated by a Piotroski F-Score of 8 and an Altman Z-Score of 70.6, suggesting a very healthy financial position. Furthermore, Nvidia's stock has shown significant long-term appreciation, with a 52-week price change of 151.29% and a year-to-date change of 148.12%.
Despite these strengths, there are warning signs, such as the Beneish M-Score of -0.6, which implies potential manipulation of financial results. Insiders have been selling shares, with 34 transactions over the past three months amounting to 8,282,733 shares sold.
In conclusion, while Nvidia's (NVDA, Financial) recent performance and near-term guidance are strong, investor concerns about the timing of the Blackwell processors and high valuation metrics have contributed to today's stock price decline.
