On Thursday, Cantor Fitzgerald adjusted its outlook on NVIDIA Corporation (NASDAQ:NVDA), increasing the price target to $900 from the previous $775. The firm maintains an Overweight rating on the stock. The adjustment follows NVIDIA's recent financial performance, which surpassed high market expectations with a $2 billion revenue beat for both the January and April periods.
The analyst from Cantor Fitzgerald highlighted NVIDIA's guidance, which suggests that demand will outpace supply throughout the calendar year 2024, indicating sustained top-line growth. The company has also provided conservative gross margin guidance and a higher tax rate, which the analyst believes leaves room for potential upside.
Management's comments regarding expected shortages for new products, such as the H200, Spectrum-X, and B100, were also noted. These anticipated shortages are seen as a sign that NVIDIA's growth could extend well into the calendar year 2025. The confidence in continued growth is reinforced by the analyst's projections, which set earnings per share estimates at $23 for CY24, up from the consensus of $20.92, and $28 for CY25, above the consensus of $23.26.
The raised price target to $900 is based on 32 times the firm's calendar year 2025 earnings per share estimate. Despite this significant target increase, the analyst suggests that the new price target might still be conservative. NVIDIA's strong performance and positive outlook have solidified its position as a top pick for Cantor Fitzgerald, as they reiterated their Overweight rating on the company's shares.
InvestingPro Insights
NVIDIA Corporation (NASDAQ:NVDA) has been the subject of positive adjustments by analysts, and the data from InvestingPro supports a robust financial outlook. According to InvestingPro, NVIDIA is trading at a high earnings multiple, with a current P/E ratio of 87.03, reflecting investors' willingness to pay a premium for its future earnings potential. This valuation is supported by strong revenue growth, with the last twelve months as of Q3 2024 showing an impressive 57.07% increase in revenue.
The company's financial health is further bolstered by its gross profit margin, which stands at 69.85% for the same period, indicating efficient management and a strong competitive edge in its operations. Moreover, NVIDIA has demonstrated a significant return on assets, with a rate of 39.92%, showcasing its ability to generate profits from its asset base effectively.
InvestingPro Tips for NVIDIA highlight that the company has a perfect Piotroski Score of 9, suggesting that it is financially healthy and has strong prospects. Additionally, analysts are optimistic about the company's future, with 12 analysts having revised their earnings upwards for the upcoming period. This confidence is mirrored in the company's stock performance, with a year-to-date price total return of 36.25% and a one-year price total return of 225.25%, emphasizing NVIDIA's strong market presence.
For investors seeking more detailed analysis and additional InvestingPro Tips, NVIDIA currently has over 20 tips available on InvestingPro. These tips provide deeper insights into the company's financials, stock performance, and industry standing. To access these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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