Earnings Calendar (26May25)
The interesting earnings this week include Nvidia, Salesforce, Costco, C3 AI, Best Buy and Dell.
Let us look at Nvidia.
The stock price grew 23% from a year ago. Technical Analysis recommends a “Strong Buy" rating. The Analysts’ sentiment recommends a “Strong Buy” rating too. The target price is $162.77 suggests an upside of 23.98%.
Performance of Nvidia (some from Grok)
Revenue
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Growth Trend: NVIDIA's revenue has shown explosive growth, increasing from $5.01 billion in 2016 to $130.497 billion in 2025. There is exceptional growth with 39.5% 10-Year CAGR.
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Competitive Advantage: NVIDIA’s remarkable revenue growth underscores its leadership in the GPU and AI markets, capitalising on the global AI boom, gaming trends, and data centre expansion, positioning it as a key player in the tech industry.
Operating Profit
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Growth Trend: Operating profit has grown dramatically from $878 million in 2016 to $81.453 billion in 2025. The operating margin has expanded significantly, from 17.5% in 2016 to 62.4% in 2025.
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Competitive Advantage: NVIDIA’s high and expanding operating margin highlights its ability to scale efficiently while maintaining pricing power, driven by its technological leadership in GPUs and AI chips.
Earnings Per Share (EPS)
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Growth Trend: EPS has surged from $0.03 in 2016 to $2.94 in 2025, with a 10-year CAGR of 59.3%.
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Competitive Advantage: The exceptional EPS growth demonstrates NVIDIA’s ability to deliver significant shareholder value, supported by its dominance in high-growth markets like AI and gaming.
Price-to-Earnings (P/E) Ratio
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Valuation: The P/E ratio is 44.4, indicating a premium valuation, which is justified given NVIDIA’s high growth and market leadership in AI and semiconductors.
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10-Year Median Returns: The 10-year median return on assets (ROA) is 23.0%, return on equity (ROE) is 38.7%, and return on invested capital (ROIC) is 27.0%, reflecting excellent returns.
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Competitive Advantage: The high P/E ratio, combined with strong ROA and ROE, reflects NVIDIA’s ability to generate significant value, supported by its innovation and market dominance.
Free Cash Flow (FCF)
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Growth Trend: The EV/FCF ratio is 52.7, indicating a high valuation relative to free cash flow, but the 10-year CAGR for FCF is 54.1%, showing robust cash flow growth. The 10-year median FCF margin is 29.1%.
For the coming earnings, the EPS and revenue forecast are $0.0893 and $43.12B, respectively.
While Nvidia is one of the most exciting businesses, we should invest in the business at a price with a good margin of safety. I have done up price targets (with application of different margins of safety) using various valuation models. I am looking at a target per-share price of about $70.
For now, I prefer to remain a spectator instead of an investor.
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