The consensus earnings estimate of $5.39 for the current fiscal year indicates a year-over-year change of +21.4%. The Zacks Consensus Estimate has changed -2.2% over the last 30 days. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.įor the current quarter, Nvidia is expected to post earnings of $1.26 per share, indicating a change of +21.2% from the year-ago quarter.

A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher.

And if earnings estimates go up for a company, the fair value for its stock goes up. We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection.

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