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Today we're going to take a look at the well-established NVIDIA Corporation (NASDAQ:NVDA). The company's stock saw a decent share price growth of 18% on the NASDAQGS over the last few months. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at NVIDIA’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for NVIDIA
What Is NVIDIA Worth?
The stock is currently trading at US$137 on the share market, which means it is overvalued by 35% compared to our intrinsic value of $101.43. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since NVIDIA’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from NVIDIA?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to more than double over the next couple of years, the future seems bright for NVIDIA. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? NVDA’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe NVDA should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on NVDA for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for NVDA, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.