1 Tech Stock That's Safe And 1 That's Not

Recent data suggests that the U.S. economy has been more resilient than expected, despite the Fed’s efforts to cool it down through monetary tightening. However, the market widely expects the central bank to implement a lower rate hike in its meeting this month.

However, many economists believe that the terminal interest rates will beat the earlier estimates. This might tighten fund availability for growing businesses while softening consumer demand in the year ahead.

Hence it would be safe to bet on stocks with an encouraging outlook while avoiding the weak ones.

Given the uncertain economic outlook, do you expect a Santa Claus Rally this year?

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Given its strong trends, it could be wise to buy NVIDIA Corporation (NVDA) to capitalize on increased consumer spending on electronics during holidays. On the other hand, CrowdStrike Holdings, Inc. (CRWD) might be best avoided now, given its downtrend.

NVIDIA Corporation (NVDA)

NVDA is a global provider of graphics, computation, and networking solutions. The company operates through two segments: Graphics and Compute & Networking.

NVDA’s revenue has exhibited a 41.8% CAGR over the past three years. During the same time horizon, the company’s EBITDA and net income have also grown at 51.6% and 35.2% CAGRs, respectively.

For the fiscal third quarter, ended October 30, 2022, NVDA’s non-GAAP operating income increased 15.9% sequentially to $1.54 billion, while its non-GAAP net income came in at $1.46 billion, up 12.7% quarter-over-quarter. This resulted in a sequential increase of 13.7% in non-GAAP EPS to $0.59 during the same period.

Analysts expect NVDA’s revenue and EPS for the fiscal fourth quarter to increase 1.5% and 37.9% sequentially to $6.02 billion and $0.80, respectively. The company has surpassed consensus EPS estimates in two of the trailing four quarters. Continue reading "1 Tech Stock That's Safe And 1 That's Not"

1 Strong Trending Financial Stock And 1 To Avoid

With a slower increase in supplier and consumer prices signaling an easing of inflationary pressures, hopes of less aggressive interest rate hikes by the Federal Reserve are also rising.

While a broad economic recovery bodes well for the financial services sector, given rising borrowing costs and credit risks, traders should be judicious in picking stocks from this space.

How much do you expect the Fed to hike interest rates in December?

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Given its strong price trends, it could be wise to buy NerdWallet, Inc. (NRDS) to capitalize on the industry tailwinds. On the other hand, Ally Financial Inc. (ALLY) might be best avoided now, given its downtrend.

NerdWallet, Inc. (NRDS)

NRDS operates as a personal finance company. Through its platform, it delivers a range of financial products, including credit cards, mortgages, insurance, SMB products, personal loans, banking, investing, and student loans, to empower consumers and small and medium-sized businesses (SMBs) to make informed financial decisions at the right time.

For the fiscal 2022 third quarter, which ended September 30, 2022, NRDS’s revenue increased 45% year-over-year to $142.6 million, driven primarily by success across credit cards, banking, personal loans, and SMB verticals. During the same period, the company’s net income came in at $0.7 million or $0.01 per share, compared to a net loss of $7.8 million or $0.16 per share in the previous-year quarter.

Analysts expect NRDS to report revenue of $139.59 million for the fourth quarter of the current fiscal, ending December 2022, registering a 40.3% year-over-year increase. During the same period, the company’s EPS is expected to come in at $0.08, compared to a loss of $0.13 per share in the year-ago period.

Owing to its strong performance and solid growth prospects, NRDS is currently commanding a premium valuation compared to its peers. In terms of forward P/E, NRDS is currently trading at 67.53x compared to the industry average of 10.39x. Also, its forward EV/EBITDA multiple of 15.43 compares to the industry average of 12.28. Continue reading "1 Strong Trending Financial Stock And 1 To Avoid"