NVIDIA Corp (NVDA) Reported a 61.87% Operating Margin Last Year—What’s the Real Story?
William Blair has recently initiated NVIDIA Corp (NVDA) stock to Outperform rating, as announced on September 18, 2024, according to Finviz. Earlier, on August 29, 2024, Needham had reiterated the stock to Buy, setting a price target of $145 for NVDA stock. Goldman also reiterated Buy rating with a price target of $135. Additionally, New Street raised Buy rating on August 6, 2024. TD Cowen analysts, in their report published on July 15, 2024, also reiterated Buy rating and set a price target of $140 for NVIDIA Corp’s stock. Analyst ratings are significant because they provide insights into stock performance expectations, influencing investor decisions and market sentiment.
NVIDIA Corp (NVDA) Stock Trading Recap
On Wednesday, NVIDIA Corp (NVDA) stock saw a modest uptick, ending the day at $118.85 which represents a slight increase of $1.85 or 1.58% from the prior close of $117. The stock opened at $116.44 and touched a low of $115.14 during the day, reaching a high of $119.38. The volume of shares traded was 211.26 million falling short of the average volume of 325.04 million.
NVDA Stock Performance and Moving Averages
In recent trading, NVIDIA Corp (NVDA) stock price has shown some volatility, fluctuating -3.77% over the last five trades and 10.05% over the past 30 trades. This represents a notable shift from earlier in the year. Over the last six months, the stock has risen by 33.59%, and it has plunged by -7.35% in the previous three months. Currently, NVDA is trading at 2.90%, 2.65%, and 25.05% relative to its 20-Day, 50-Day, and 200-Day Simple Moving Averages, respectively.
As of the latest trading close, NVDA, a Technology sector stock, is trading -15.57% below its 52-week high but remains 202.96% above its 52-week low. The Average True Range (ATR) (14 days) of 5.3 highlights the stock’s average volatility, providing insight into how much the price typically fluctuates. This measure is crucial for understanding potential price swings and assessing overall market risk.
NVIDIA Corp’s Profitability and Valuation Ratios
NVIDIA Corp’s profitability metrics reveal strong financial health. The company currently boasts an operating margin of 61.87% and a profit margin of 55.04%, with a gross margin of 33.59%. The profit margin, also known as the revenue ratio or gross profit ratio, measures how efficiently a company converts sales into net income; higher margins indicate greater profitability.
In terms of valuation, NVIDIA Corp’s market capitalization stands at $2915.39 billion. Market cap represents the total value of all outstanding shares and is a key indicator of a company’s market value. The stock’s price-to-earnings (P/E) ratio is 55.8, assessing the company’s valuation relative to its earnings. The forward P/E ratio, which uses projected earnings for the next financial year, is 29.44. Additionally, the Price-to-Sales Ratio is 30.27, reflecting the market’s valuation of the company’s sales, while the Price-to-Book Ratio is 50.2, comparing the market value to the company’s book value.
Understanding Insider Trading
Investors often prefer to invest in shares held by company insiders, as management is typically more aligned with the company’s success and shareholder interests. Currently, insiders own just 3.98% of NVIDIA Corp (NVDA)’s shares, while financial institutions hold 65.60%.
Notable insider trades include STEVENS MARK A, Director at NVIDIA Corp (NVDA), who sold 40000 shares on Sep 27 ’24, at $121.01 each, totaling $4.84 million. On Sep 24 ’24, STEVENS MARK A, Director, sold 165100 shares for $121.27 each, amounting to $20.02 million. Additionally, on Sep 19 ’24, COXE TENCH sold 1000000 shares at $119.27 each, generating $119.27 million.