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what is going on investors hopefully you guys are having a great day out there time to talk about nvidia corporation ticker symbol nvda this company just reported their q1 earnings and we are going to get into them we'll take a look at the numbers we'll take a look at the revenue the profit we'll take a look at the revenue trends as well take a look how gaming data center all their key business models kind of been trending not only year over year but they also give you kind of a quarterly revenue trend here with nvidia as well also go over to the stock chart as well see how this one is reacting to the news of the q run results and also we got q2 guidance as well at least on the revenue side we'll talk about that as well and now obviously we've got to talk about this four to one stock split nvidia announced on may 21st they're gonna do a four to one stock split sometime after june 3rd and so we'll talk about should you buy before or after or should you buy nvidia shares at all we'll talk about that as well now let's jump over to the q1 numbers they came in at 5.66 billion dollars that is 83 growth year over year they beat by 250 million now more importantly they gave us guidance for the second quarter so this upcoming quarter they're expecting revenue to be 6.3 billion dollars plus or minus 2 percent the street was expecting 5.48 billion i would actually probably expect closer to 6.5 billion dollars of revenue companies tend to want to sandbag these things kind of come under so when they do these press releases they can say hey our eps beat by this and we beat on revenue it just looks good for the streets look good for the computer algorithms those types of things so i'd actually expect them to come over 6.3 billion dollars on the following quarter now before we jump into the q1 numbers and talk a little bit more about q2 as well and the stock chart nvidia is having a four to one stocks but they announced this a week or so ago and now we get a vote on it on june 3rd we should get some clarity on when the date the actual split date happens so some of you might be stumbling upon this video and wondering should you buy nvidia shares before or after the stock split and for most of you watching this you might have had apple last year tesla split last year a couple other stocks major stocks had splits last year you realize that it literally doesn't matter one bit to the value of your portfolio the day before or the day after a stock split because what i want to do is bring up a piece of pizza here you might wonder am i hungry yeah it's close to lunch time here out in california but look here's a pizza pizza would it matter if we ate this whole pizza all at once no it wouldn't matter it'd be one piece of pizza right one whole pizza what if we slice this thing in half and i ate one half and then i eat the second half i'd still be eating one pizza what if i cut this into quarters i'd still be eating one pizza and so what i want you to think about when you are thinking about stock splits is what happens during a stock split is nvidia is doing a four to one stock split so if you have one share of nvidia right now that is worth 627 after the split you will have four shares now they will not i repeat and not each be worth 427 they will be 427 divided by four because we are splitting this think of 627 like this slice of pizza it is one pizza one stock price if we divide this into four yes we are eating less pizza but overall we have this one stock price so you will have more shares but the value of those shares will be the same in relation to where the stock price was before the split so it literally doesn't matter now from a retail investor from an excitement perspective does it matter a little bit sure if nvidia was in the dow where that's a price weighted index would it matter a little bit that's why apple had to split yeah maybe a little bit but nvidia is not a part of the dow it's it's it's not having to do a split for those reasons now can the price drive up based on these news because you have i wouldn't say maybe less sophisticated investors it's probably a good way to put it they buy it based on the fact that it's going to split and that's fine that will drive the price up but in my opinion a split doesn't make a stock a buy what makes a stock a buy is the fundamentals the valuation so let's talk about that that is the most important thing when you want to analyze buying or selling a stock of any size any company now the first thing i want to do is just from a price to sales i got price the sales up these companies all manipulate their gap earnings and things like that however they want but they can't manipulate sales a sales at nvidia is the same as a dollar coming in through amd and intel and tsm taiwan semi conductor manufacturer something like that so i've got them all here nvidia is in orange amd's in blue intel's purple tsm is kind of green now what i want to show you is from a price to sales basis nvidia is always trading at a premium to these okay they're trading at 23 times sales amd's trading at eight times sales intel three tsms trading at 11.
so they are trading at a premium to its peers as well that is just something that you want to keep in mind now why why is nvidia trading at a premium to it spirit part of it is just you have this explosive growth you also have growth in areas where investors really really see even more growth going forward so you have this gaming so these are the the cpus graphic cards things like that that nvidia is making for these gaming computers now i would argue that these gaming computers not all of them are used for gaming i think you've got some crypto mining happening on a lot of gaming computers these days especially like kind of at home guy but you also have obviously explosion of gaming as well pc gaming in particular so we're seeing just explosive revenue trends over the last year or so this thing went from 1.3 billion dollars last year up to 2.7 billion dollars now data center has grown tremendously this has been a huge area of growth for nvidia we're seeing that growth starting to flatten out a little bit okay last year we're sitting at 1.1 billion dollars we're all the way up to 2 billion but you see for the last three quarters we've kind of been a fro basically a rounding error right at that two billion dollars so you would like to see this data center except not necessarily accelerate to where we're having this hundred percent growth but you would like to see this continue to go up you certainly wouldn't want to see it going down so we'll see what happens there but this gaming continues to drive they keep bolting on more and more revenue to this gaming side as long as gaming and in my opinion also crypto mining okay those both use the same types of equipment that nvidia manufactures as long as crypto mining and pc gaming remain hot then i think this company is in the right trend and can continue to move forward now let's look at the high level i tell you what we're just going to jump into the revenues i didn't really like that spreadsheet that they gave we're going to take a look at it from this perspective so we've got our revenue up here that came in at that 5.66 billion dollars like we talked about in the press release last year we were sitting right at 3 billion that's another reason why this company kind of trades at a premium to its peers although amd's growing really fast too you know one of the reasons is because they're just growing this revenue huge i mean that's 2.6 billion dollars more on that top line now the cost of revenue came in really nice too came in at 2 billion this business is i mean they're just running on all cylinders that gives us nice gross profit down here 3.6 billion dollars so on 5.6 billion dollars worth of revenue we cleared 3.6 billion of that to the gross revenue last year was sitting right at two billion dollars now we've got other operating expenses here research development selling general administrative that came in at a total of 1.6 billion 1.67 billion dollars that's about 600 million about 650 million more than where we were the year before that gives us an income from operations really close to 2 billion so on 5.6 billion worth of revenue they're clearing nearly 2 billion dollars this is income from operations this is not necessarily this is not gross profit this is factoring in all our expenses in terms of operating the business man they're clearing a ton of money this is also why when you look at the stock chart on this you look at the valuation this thing has just been going higher and higher and higher because this is a very one it's a wonderful thing for you the investor okay having strong revenue growth having very high margins but also clearing a ton of that to the income side of the business as well now from a net income perspective after you factor in some income taxes and things like that all things look very good to me now from a balance sheet perspective you assume this looks pretty good and you would be assuming correctly as well we've got on the right hand column is the beginning of the year or really the end of january and the left hand column is the most end of the most recent quarter here we've got cash and cash equivalents sitting at 12.6 billion dollars got another three billion in receivables sitting on 1.9 billion dollars worth of inventory all in all total current assets sending about 18 billion dollars our total assets sit in about 30 you call that 31 billion dollars that's up slightly from the previous period now they got a little bit of long-term debt but nothing that i would be at all concerned about you got 5.9 billion dollars worth of debt and they got about call that about a billion dollars sitting on the short-term debt side all things being considered they could wipe that out with their cash balance and still have plenty of money left over so that is looking very strong as well now from a cash flow perspective could it get any better yeah actually it could you can pull down this net income number of 1.9 billion dollars man that's so nice now you got a cash flows from our operating activities right here we pull down 1.8 billion so our net income was 1.9 billion we netted out or cash flows from operations was 1.8 billion it was 900 million so we doubled our cash flow from our operations that's phenomenal as well we've got some dividends that we're paying down here it's just overall this is just an extraordinary company okay they are printing money to the bottom line on a net income basis cash flow basis income from operation perspective this statement of operations is as about as clean as it gets okay and not only that you've got this explosive revenue growth as well although it's starting i wouldn't say it's explosive anymore we've got nice strong revenue growth as well but i think their explosive days are over we'll see if that stalls out the stock chart and i tell you what we have seen kind of a stalling out in this name okay really since of august of last year this is un this is not unlike a lot of tech names that we analyzed here on the channel they tend to go on these monster moves i mean at the end of march this was under a 200 stock and it rallied really hard up to 500 and then it's basically stalled out kind of waved out here now we're sitting way up here at about 624 dollars per share but we have not been able to get above 648 dollars per share now again we're gonna have a four to one split so you're gonna have to divide this number in four but all in all the stock chart will look the same we'll just have to adjust our numbers to that and it could be that if when you reduce this stock price by three quarters that it could introduce more investors into a stock like this the fact that it's 600 if you don't have access to fractional shares you don't understand how those work or whatever it might be well it's kind of hard to add to a position when it's 600 especially when you're talking about an ira account or something like that where you're limited on the amount of deposits that you have all in all from a technical perspective i still think we're kind of waving out here okay i'd like to see us break above 647 you break above 647 on momentum look the sky's the limit 700 bucks 750 could be in play on this one now you get rejected here at 6 45 your next logical spot where you could stop is right about 600 call it 580 to 600 there's actually two levels here at 580 to 600.
you want to pick up a share right in here wouldn't blame you now further down you gotta level down here at 540. that would be an area i'd be interested in further down right at 500 on a dot would be an interesting spot as well after the split that would just be over a hundred and change on this one so about 125 dollars per share is where i'd look after the split on that one so that's nvidia this is a stock i own this is a stock i really like over the last year it's up 73 year-to-date up 19 this is a stock you buy on any type of pullback any type of weakness any type of you know commentary out there that says hey look there maybe their business units are slowing down do they have competition yes to a certain degree they still are jus they still blow their competition away in what they play in okay their products are superior that is why consumers are willing to pay a premium for them that's also why people are willing to pay up for it especially in the gaming the crypto mining and we're now seeing in the data center as well that was in video hopefully you guys enjoyed this video we'll be back again with more very soon good luck with your investments
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