|What To Expect From Nvidia's Analyst Day on April 12 |
Shanthi Rexaline , Benzinga Staff Writer
April 09, 2021 4:33pm
NVIDIA Corporation NVDA 0.58% shares have recovered from the market-wide tech sell-off. The company has an immediate catalyst in the form of its Analyst Day, scheduled for Mon. April 12, 1 p.m. to 3 p.m. EST.
The Nvidia Analyst: Credit Suisse analyst John Pitzer maintained an Outperform rating and $620 price target for Nvidia shares.
The Nvidia Thesis: The key near-term issues the company has to address are regarding Gaming over-earning, timeline for reaccelerating year-over-year growth in core Data Center Group and the regulatory process around the Arm Holdings acquisition, analyst Pitzer said in a note.
The event, the analyst said, is likely to underscore key long-term EPS drivers, which continue to increase.
The company will likely highlight growing proof-points of a $100 billion+ total addressable market for the DCG, including $45 billion for Cloud, $30 billion for Enterprise and $15 billion for Edge, Pitzer said. Nvidia could shed light on growing software monetization, with AI Application Frameworks, the analyst added.
The company is also likely to emphasize the still-robust Gaming market, with or without crypto, and the growing momentum in autonomous driving, the analyst said.
The opportunity, according to the analyst, clearly supports a long-term gross margin of 70%, an operating margin of 50% and a free cash flow margin of 30%. For the calendar year 2020, these metrics are expected at 66%, 41% and 24%, respectively, supporting the calendar year 2021 EPS of $13.35, roughly in line with the consensus, the analyst said.
NVDA Price Action: Nvidia shares were down 0.58% at $576 at market close Friday.