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B Riley FBR: Nvidia Remains Attractive For Growth Investors Ahead Of Analyst Day

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B Riley FBR: Nvidia Remains Attractive For Growth Investors Ahead Of Analyst Day
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NVIDIA Corporation (NASDAQ: NVDA) is scheduled to host its annual analyst day March 27 during the San Jose GPU Conference.

The Analyst

B Riley FBR analyst Craig Ellis retained a Buy rating on the shares of Nvidia with a $290 price target.

The Thesis

A GeForce product launch from CEO Jensen Huang is likely, Ellis said in a Monday morning note.

The analyst said he expects a SAM growth updates from the Platform Group, with gross margins totaling $280 billion in 2020 and beyond, and a financial focus on robust growth, margin expansion and steady capital returns.

Nvidia shares are expected to take "a meaningful leg higher" in calendar 2018, aided by an array of growth catalysts and rising Street estimates.

"Our analysis shows tight channel inventory in a seasonally soft period and vibrant ecosystem growth based on GPU pricing and e-sports analysis — sustaining heady multiyear growth seems possible," Ellis said.

B Riley estimates that Nvidia's data center business will grow more than 100 percent in 2019 and if a long-term shift of 70 percent of hyperscale and enterprise workloads to AI plays out. 

The firm sees Volta-based Tesla GPU cards and DGX-1 systems as becoming "de facto inferencing standards," helped by 2018's server expansion and ASP dynamics.

The auto segment is expected to have a positive 2019, Elis said: steady new T-1 engagements in transportation's full ecosystem bode well for an "explosive" 2020 and 2021, as advanced driver assistance systems and autopilot move to mass production.

Under CFO Colette Kress, B Riley expects diversified growth to continue, with the mix fueling GM/OM expansion past 62-percent and 41-percent levels, respectively. 

"In sum, forceful growth spans all segments LT as competitive advantages persist." 

The Price Action

Nvidia shares are up about 134 percent over the past year.

The stock was down 3.25 percent at $242.35 at time of publication Monday. 

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Photo courtesy of Nvidia. 

Latest Ratings for NVDA

DateFirmActionFromTo
Nov 2018JefferiesMaintainsBuyBuy
Nov 2018Raymond JamesMaintainsOutperformOutperform
Nov 2018BMO CapitalMaintainsMarket PerformMarket Perform

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