Nvidia (NVDA)
Price $164.43
11/16/2017: Price $164.43: PE ratio was 21.41
Thanks to seekingalpha for their transcripts
Thanks to Tom Engle for the use of this template
2Q:2019 Notes:
Revenue this quarter was up 21% this has cut Revenue growth in half and I think it is important that we all understand this. Was this because people found a better video card? I don’t think so. Was it because their data center business was disrupted by another competitor. Not a chance. So why did their Revenue growth slip down from the 40% range to the 21% range? Well I think the transcript explains it all. Here is what Colette Kress had to say.
However, gaming was short of expectations as post crypto channel inventory took longer than expected to sell through. Gaming card prices, which were elevated following the sharp crypto falloff, took longer than expected to normalize
Pascal is well positioned as the GPU of choice in the midrange for the holidays, and we expect to work down channel inventories over the next quarter or 2
Ok so here is the problem. Their middle of the road video cards didn’t sell. They thought, I thought, that the crypto cards couldn’t hurt their sales. I thought no one would want to buy a used card that was used to run a crypto farm. But I forgot about how I felt about getting a bargain when I was younger. It really never worked out when I bought the product that had been used and returned, I never was satisfied with the product so eventually I had to go out and buy the better product, beating myself over the head for buying the cheap product and now spending 1.5 times for the better product. Also, I never thought that anyone would go out and buy AMD graphic cards but if you get them cheap enough I guess anyone will buy them, but really how long are the gamers going to want to use these cards? Here is what Huang had to say.
I think the channel has more than 12 weeks of inventory between us and the other brand. One of the things that is hard to estimate is how much inventory the other brands have. And our quarter is 1 month later. And so whatever action we take, whatever we see in the channel is 1 month after their end of the quarter. The amount of inventory is not just us. It’s also the other brands. And our ability to see the other brand’s inventory is just much harder. We try our best to estimate it, but obviously, we didn’t estimate it well enough. And so the answer to your question is yes, I think there’s about – from our perspective, about 12 weeks of our inventory to sell through at this point.
So the other brands are AMD. They just couldn’t see how much inventory AMD had and what they would sell it for. They need to sell through that inventory in the middle of the market to get back to normal. Now we know next quarter is shot, and it could even go into Q12019.
What is NVDA going to do? Well in their conference call,
And as we looked out into this quarter, this coming quarter, we came to the conclusion that the best thing to do is just not to ship any more products into this segment of the marketplace because there’s a fair amount of inventory and let the channel sell through the midrange Pascals. And then a quarter’s time, we’ll get back to business.
So now we know next quarter will not be good either.
Bright side: So that is the dark side for the Video card segment, what could be the bright side? I think ray tracing with the turing card will be their next catalyst. Battleground 5 has already came out supporting it and I am sure all the gamers will want this card, that AMD does not have.
https://www.youtube.com/watch?v=uzaGI78NtkE
It doesn’t look like much because it is just for shadows but it makes everything look more realistic.
Huang stated on the conference call that their high-end Pascal GPU’s are largely sold before they ramped up the high-end Turing products.
The other growth area was the Data Center market. It went down from 83% growth to
58% growth. I do not think this is a trend but are customers waiting on the new chip that just came out. They just launched the Turing T4 Cloud GPU during the quarter. Here is what Colette Kress had to say:
Demand remains strong for both the architecture products, including Tesla V100 and VGX systems, and our inference business continued to grow, benefiting from the launch of the Turing T4 Cloud GPU during the quarter. Just 2 months after its launch, the T4 has received the fastest adoption of any server GPU. It is integrated into 57 server designs and it is already on the Google Cloud Platform, its first cloud availability. The T4 delivers world record performance for deep learning inference and accelerates diverse cloud workloads, including high-performance computing, deep learning training and inference, machine learning, data analytics and graphics.
They also came out with an updated TensorRT software stack and TensorRT Hyperscale Platform. This is for the NVDA inference platform and enables multiple models and multiple frameworks to run on the same GPU at the same time. Second it intergrates with Kubernetes. This new T4 GPU is 12x the peak inference performance than the old T4 and this new platform is 40x faster than CPU’s. With this they hope to take the data center inference market.
They also launched a new NVDA RTX Server reference architecture. It has 8 Turing-based RTX 8000 and it is for photoreal rendering and computer-generated images. This is for the professional visualization market. This is what she had to say about it.
Yet prior to Turing and its ray-tracing capabilities, GPUs were not able to address this workload. So most rendering at – up to this point has been done on CPUs. An RTX-accelerated render farm compared with an equivalent performance of CPU render farm is 1/4 the cost, 1/10 the space and 1/11 the power. NVIDIA’s RTX platform has garnered major industry support, including from key developers such as Adobe, ANSYS, Autodesk, Dassault and many others.
Also, NVDA came up with a GPU acceleration platform for data science and machine learning called RAPIDS, which lets companies analyze massive amounts of data and make accurate business predictions at unprecedented speed. Up to now this was all done by CPU’s and this system is 50 times faster. This is for the OEM&IP market. This is what Colette had to say.
The RAPIDS launch opens up a $20 billion server market used for data analytics and machine learning workloads to GPUs, and it’s received broad industry support, including from Oracle, IBM, SAP, Dell EMC, Hewlett Packard Enterprise, Microsoft Azure machine learning, Google, Q-Flow as well as the open source community.
Finally, in their Automotive sector they announced that Volvo Cars selected Nvidia’s Drive AGX Xavier next-generation which will be released in early 2020 and will deliver Level 2+ assisted driving.
Conclusion: The Gaming Revenue into next quarter will be down 30% plus. An Analyst on the conference call asked that question and Colette confirmed it. This surprised the whole NVDA team and it surprised a lot of people. The chips coming out of crypto really had an affect on NVDA. The glut on the market hurt all of the companies that were in the market. I think the one valid criticism of Huang would be that sometime in the quarter he must have seen what was happening and didn’t put out a press release. Here is AMD’s CEO on CNBC.
https://www.youtube.com/watch?v=2XLhPSJJsn8
I do think that the Data Center market was light but I think that will come back strong next quarter with the release of their new Turing product.
The professional visualization market will keep growing and their new product should take market share but it isn’t going to be a big growth product.
The automotive product should start growing stronger but it still will not be a lot of their revenue.
I think the new product that they introduced for data science and machine learning (RAPIDS) could be a big growth market and eventually be broken out.
Overall this was a really weak quarter that NVDA had no chance of seeing because they couldn’t estimate the glut in the gaming market. The crypto market was a bigger overhang than anyone thought and it caught all the major players by surprise, although their were a number of shorts that had it right. I am keeping all my shares and not adding at this time but hopefully there will be a bigger pull back so I can buy more, I predict this company in 3 years will be a double from this point. Here are some numbers.
In Millions Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319
Gaming 1348 1030 1186 1561 1736 1720 1800 1764
Prof. Vis 225 205 235 239 255 251 281 305
Data Center 296 409 416 501 606 701 760 792
Auto 128 140 242 144 32 145 161 172
OEM&IP 176 224 251 191 111 390 121 148
Total: 2173 2008 2330 2636 2740 3207 3123 3181
Andy
Current numbers:
11/15, 2018 3Q:2019 earnings highlights:
** Revenue was $3.181 billion up 21% from $2.636 billion
** TTM revenue was $12.42 billion or $19.87 per share
** Earnings were $1.97 up from $1.33
** TTM earnings were $7.68 per share
** Diluted share count 625 million
** Cash $7.591 billion: debt $1.990 billion
** Cash flow for nine months was $2.448 billion up from $1.967 million
** Cash flow for the quarter was $337 million down from $1,088 million
** TTM cash flow was $3.390 billion or $5.424 per share
** Trading range between August 17, 2018 and November 16, 2018 was $161.61 to $292.76 : PE ratio range was 21.04 to 38.11: PS ratio range was 8.13 to 14.73: Cash flow yield range was 3.4% to 1.9%
** Special note: The stock price fell $37.96 the day after the report to close at $164.43
Historic numbers:
February 17, 2016 4Q:2016 earnings’ highlights:
** 4Q revenue was $1.401 billion up from $1.251 billion
** Fiscal 2016 revenue was $5.01 billion up from $4.682 billion
** TTM revenue per share was $8.45 per share
** 4Q earnings were $0.35 compared to $0.35
** Fiscal 2016 earnings were $1.08 down from $1.12
** Diluted share count 593 million
** Cash $5.037 billion: debt $1.413 billion
** Cash flow for the year was $1.089 billion or $1.84 per share
** Stock based compensation for the year was $204 million up from $1.58 million
** Trading range between February 17, 2016 and May 12, 2016 was $29.30 to $37.15: PE ratio range was 27.13 to 34.40: PS ratio range was 3.47 to 4.40: Cash flow yield range was 4.95% to 6.3%
** Special Note: The stock price rose $2.38 the day after the report to close at $30.44 on February 18, 2016
May 12, 2016 1Q:2017 earnings’ highlights:
** Revenue was $1.305 billion up from $1.151 billion
** TTM revenue was $5.164 billion or $8.65 per share
** TTM revenue per share was $8.65 per share
** Earnings were $0.33 up from $0.24
** TTM earnings were $1.17 per share
** Diluted share count 597 million
** Cash flow for the quarter was $254 million up from $216 million
** TTM cash flow was $1.127 billion or $1.89 per share
** Cash $4.753 billion: debt $1.421 billion
** Trading range between May 12, 2016 and August 11, 2016 was $38.68 to $59.61: PE ratio range was 33.05 to $50.95: PS ratio range was 4.47 to 6.89: Cash flow yield range was 3.2% to 4.9%
** Special Note: The stock price rose $5.41 the day after the report to close at $40.98 on May 13, 2016
August 11, 2016 2Q:2017 earnings’ highlights;
** Revenue was $1.428 billion up from $1.153 billion
** TTM revenue was $5.439 billion or $10.19 per share
** Earnings were $0.40 up from $0.05
** TTM earnings were $1.52 per share
** Diluted share count was 534 million
** Cash flow for six months was $406 million up from $355 million
** TTM cash flow was $1.14 billion or $2.13 per share
** Cash was $4.879 billion: debt $1.428 billion
** Gross margins 57.9%
** Trading range between August 11, 2016 and November 10, 2016 was $57.10 to $72.67: PE ratio range was 37.57 to 47.81: PS ratio range was 5.60 to 7.13: Cash flow yield range was 2.9% to 3.7%
** Special Note: The stock price rose $3.34 the day after the report to close at $63.04 on August 12, 2016
November 10, 2016 3Q:2017 earnings’ highlights:
** Revenue was $2.004 billion up 53.3% from $1.305 billion
** TTM revenue was $6.138 billion or $9.40 per share
** Earnings were $0.83 up from $0.44
** TTM earnings were $1.91 per share
** Diluted share count 653 million
** Cash flow nine months was $826 million up from $593 million
** TTM cash flow was $1.322 billion or $2.03 per share
** Cash $6.671 billion: debt $1.982 billion
** Trading range between November 10, 2016 and February 9, 2017 was $78.20 to $120.64: PE ratio range was 40.94 to 63.16: PS ratio range was 8.32 to 12.83: Cash flow yield range was 1.68% to 2.6%
** Special Note: The stock price rose $20.20 the day after the report to close at $87.97 on November 11, 2016
February 9, 2017 4Q:2017 earnings’ highlights:
** 4Q revenue was $2.173 billion up 55.1% from $1.401 billion
** Fiscal 2017 revenue was $6.91 billion up from $5.01 billion
** TTM revenue per share was $10.47 per share
** 4Q earnings were $0.99 up from $0.35
** Fiscal 2017 earnings were $2.57 up from $1.08 per share
** Cash $6.798 billion: debt $2.81 billion
** Cash flow for the year was $1.496 billion or $2.27 per share?** Cash flow for the quarter was $670 million
** Stock based compensation for the year was $247 million up from $204 million
** Diluted share count was 660 million
** Trading range between February 9, 2017 and May 9, 2017 was $95.17 to $120.70: PE ratio range was 37.03 to 46.97: PS ratio range was 9.09 to 11.53: Cash flow yield range was 1.9% to 2.4%
May 9, 2017 1Q:2018 earnings’ highlights:
** Revenue was $1.937 billion up 48.4% from $1.305 billion
** TTM revenue was $7.542 billion or $11.76 per share
** Earnings were $0.79 up from $0.35
** TTM earnings were $3.01 per share
** Diluted share count 641 million
** Annual dividend $0.56 per share
** Cash $6.206 billion: debt $2.206 billion
** Cash flow for the quarter was $228 million down from $264 million
** TTM cash flow was $1.46 billion or $2.28 per share
** Gross margins 59.37%: Operating margins 28.6%
** Trading range between May 9, 2017 and August 10, 2017 was $114.02 to $174.56: PE ratio range was 37.88 to 57.99: PS ratio range was 9.7 to 14.84: Cash flow yield range was 1.3% to 2%
** Special Note: The stock price rose $18.35 the day after the report to close at $121.29 on May 10, 2017
August 10, 2017 2Q:2018 earnings’ highlights:?** Revenue was $2.23 billion up 56.16% from $1.428 billion
** TTM revenue was $8.344 billion or $13.18 per share
** Earnings were $0.92 up from $0.41
** TTM earnings were $3.52 per share
** Diluted share count 633 million
** Cash $5.877 billion: debt $2.068 billion
** Cash flow for six months was $879 million up from $432 million
** Cash flow for the quarter was $651 million up from $168 million
** TTM cash flow was $1.943 billion or $3.07 per share
** Trading range between August 10, 2017 and November 9, 2017 was $152.91 to $212.90: PE ratio range was 43.44 to 60.48: PS ratio range was 11.6 to 16.15: Cash flow yield range was 1.4% to 2%: Cash flow yield range was 1.4% to 2%
** Special Note: The stock price fell $8.78 the day after the report to close at $155.96 per share
November 9, 2017 3Q:2018 earnings’ highlights:
** Revenue was $2.636 billion up 31.5% from $2.004 billion
** TTM Revenue was $8.972 billion or $14.29 per share
** Earnings were $1.33 up 60.2% from $0.83
** TTM Earnings were $4.02
** Diluted share count 628 million
** Cash $6.32 billion: debt 0
** Cash flow for nine months was $1.967 billion up from $826 million
** Cash flow for the quarter was $1.088 billion up from $394 million
** TTM cash flow was $2.637 billion or $4.20 per share up from $2.03
** Trading range between November 9, 2017 and February 8, 2018 was $180.58 to $249.27: PE ratio range was 44.92 to 62: PS ratio range was 12.63 to 17.44: Cash flow yield range was 1.69% to 2.3%
** Special Note: The stock price rose $10.82 the day after the report to close at $215.99 on November 10, 2018
February 8, 2018 4Q:2018 earnings’ highlights:
** Revenue was $2.911 billion up 33.96% from $2.173 billion
** Fiscal 2018 revenue was $9.714 billion up from $6.91 billion
** TTM revenue per share was $15.47 per share
** 4Q earnings were $1.78 up from $0.99
** Fiscal 2018 was $4.82 per share up from $2.57 per share
** Diluted share count 628 million
** Cash $7.11 billion: debt $2 billion
** Cash flow for the year was $2.91 billion or $4.63 per share
** Cash flow the quarter was $943 million up from $670 million
** Stock based compensation was $391 million
** Trading range between February 8, 2018 and May 10, 2018 was $210.30 to $260.50: PE ratio range was 43.63 to 54.05: PS ratio range was 13.59 to 16.84: Cash flow yield range was 1.78% to 2.2%
May 10, 2018 1Q:2019 earnings’ highlights:
** Revenue was $3.21 billion up 65.7% from $1.937 billion
** TTM Revenue was $10.987 billion or $17.52 per share
** Earnings were $1.95 up from $0.79
** TTM earnings were $5.98 per share
** Diluted share count 627 million
** Cash flow for the quarter was $1.327 billion up from $228 million
** TTM cash flow was $4.01 billion or $6.39 per share
** Cash $7.3 billion: debt $2 billion
** Trading range between May 10, 2018 and August 16, 2018 was $235.01 to $269.20: PE ratio range was 39.30 to 39.30: PS ratio range was 13.41 to 15.37: Cash flow yield range was 2.4% to 2.7%
August 16, 2018 2Q:2019 earnings highlights:
** Revenue was $3.123 billion up 40% from $2.23 billion
** TTM revenue was $11.88 billion or $18.98 per share
** Earnings were $1.78 up from $0.92
- TTM earnings were $6.84 per share
** Diluted share count 626 million
** Cash $7.943 billion: debt $2 billion
** Cash flow for six months was $2.1 billion up from $879 million
** Cash flow for the quarter was $773 million up from $651 million
** TTM cash flow was $4.131 billion or $6.60 per share
** Trading range between August 16, 2018 and October 31, 2018 was $176.01 (October 29, 2018) to $292.76 (October 2, 2018): PE ratio range was 25.73 to 42.80: PS ratio range was 9.27 to 15.43: Cash flow yield range was 2.3% to 3.8%
** Special note: The stock price fell $12.62 the day after the report to close at $244.82 on August 17, 2018
