NVIDIA (NVDA) to Report Q3 Earnings: What's in the Offing?

NVIDIA Corporation NVDA is scheduled to release third-quarter fiscal 2022 results on Nov 17.

For the fiscal third quarter, the company expects revenues of $6.8 billion (+/-2%). The Zacks Consensus Estimate for the same is pegged at $6.83 billion, indicating a 44.5% jump from the year-ago reported figure.

The Zacks Consensus Estimate for quarterly earnings is pegged at $1.11, suggesting a significant year-over-year improvement of 52.1%.

The company’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 9.6%.

Let’s see how things have shaped up before the announcement.

NVIDIA Corporation Price and EPS Surprise

NVIDIA Corporation price-eps-surprise | NVIDIA Corporation Quote

Factors at Play

The pandemic-induced remote-working wave is likely to have bolstered sales of graphic chips utilized in desktops and laptops and is anticipated to have aided NVIDIA’s third-quarter performance.

Continued strength in its data-center business on the growing adoption of cloud-based solutions amid the COVID-19 crisis-induced work-from-home wave is expected to have boosted the company’s revenues. An increase in Hyperscale demand and growing adoption in the inference market are likely to have been tailwinds in the to-be-reported quarter.

NVIDIA’s growth opportunities in ray-traced gaming, rendering, high-performance computing and artificial intelligence are likely to have been driving factors during the period in discussion. A series of blockbuster AAA titles, which pledged support for the NVIDIA RTX ray tracing technology might have been a positive as well.

Furthermore, the company’s Automotive and Professional Visualization divisions have shown improving trends over the last two quarters. The Automotive segment’s revenues increased 37% year on year in the second quarter, primarily aided by the continued recovery in the global automotive production volumes.

Professional Visualization revenues jumped a whopping 156% year over year in the second quarter. This growth mainly resulted from the increased sales of notebook workstations’ graphics processing units (GPUs) and the ramp-up of Ampere architecture GPUs.

We expect the trends in Automotive and Professional Visualization to have continued in the third quarter of fiscal 2022.

However, the disruptions in retail channel sales due to travel restrictions and social-distancing measures implemented by governments across the world to contain the spread of COVID-19 might have partially offset the benefits of solid demand for the remote-working and online-learning hardware infrastructure.

What Our Model Says

Our proven model does not predict an earnings beat for NVIDIA. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Though NVIDIA currently carries a Zacks Rank of 2, it has an Earnings ESP of 0.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combinations

Per our model, Macy’s M, BellRing Brands BRBR and Applied Materials AMAT have the right combination of elements to post an earnings beat in their upcoming releases.

Macy’s carries a Zacks Rank #2 and has an Earnings ESP of +9.80%. The company is scheduled to report third-quarter fiscal 2022 results on Nov 18. Macy's earnings have surpassed the Zacks Consensus Estimate in the trailing four quarter, the average surprise being 269.8%.

The Zacks Consensus Estimate for Macy’s third-quarter earnings is pegged at 29 cents per share, suggesting year-over-year growth of 252.6%. The consensus mark for revenues is pinned at $5.22 billion, indicating a year-over-year increase of 30.9%.

BellRing Brands is slated to report fourth-quarter fiscal 2021 results on Nov 18. The stock carries a Zacks Rank #2 and has an Earnings ESP of +14.11%. BellRing Brands' earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 23.2%.

The Zacks Consensus Estimate for quarterly earnings is pegged at 27 cents per share, suggesting a year-over-year improvement of 8%. BellRing Brands’ quarterly revenues are estimated to increase 27.5% year over year to $360.2 million.

Applied Materials currently carries a Zacks Rank #2 and has an Earnings ESP of +0.52%. The semiconductor company is scheduled to report  fourth-quarter fiscal 2021 results on Nov 18. Applied Materials' earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 8.1%.

The Zacks Consensus Estimate for Applied Materials’ fourth-quarter earnings is pinned at $1.94 per share, suggesting a year-over-year jump of 55.2%. AMAT estimates to report revenues of $6.33 billion, which suggests an increase of 35.1% from the year-ago quarter.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.