NVIDIA CORP (NASDAQ:NVDA) Embodies the CAN SLIM Investment System

The CAN SLIM investment methodology, created by William O’Neil, joins fundamental and technical analysis to find high-growth market leaders. This methodical process assesses companies using seven main factors represented by the letters CAN SLIM, concentrating on earnings speed, yearly growth patterns, new products or services, supply and demand forces, market leadership, institutional investment, and the general market trend. Stocks that satisfy these strict conditions usually show solid fundamental condition while trading close to new highs with notable institutional support.

Earnings and Sales Momentum

NVIDIA CORP (NASDAQ:NVDA) shows outstanding quarterly results that fit the “C” condition in CAN SLIM, which highlights current quarterly earnings and sales growth. The company’s latest quarterly report presents:

• EPS growth of 54.4% compared to the same quarter last year
• Revenue growth of 55.6% year-over-year
• Both numbers are notably above the suggested 20-25% minimum level in the CAN SLIM system

This pattern of increasing growth signals strong business speed, an important element for CAN SLIM investors looking for companies with growing profitability and market need.

Annual Earnings Growth and Profitability

The “A” in CAN SLIM looks at yearly earnings gains, and NVIDIA’s long-term record is a good example of this need. The company has reached:

• Three-year EPS compound annual growth rate of 88.8%
• Return on Equity of 86.5%, much higher than the 10% minimum level
• Steady profitability over several years with widening margins

These numbers show NVIDIA’s capacity to maintain outstanding growth over long stretches, lowering the danger of investing in companies with only short-term success.

Innovation and Market Position

NVIDIA’s leading position in accelerated computing and artificial intelligence solutions meets the “N” condition, which looks for companies with recent products, services, or technology edges. As a top company in:

• AI computing platforms and data center solutions
• Gaming and professional visualization
• Self-driving vehicle technology and robotics

The company works at the front of several changing technology areas, setting it up for continued growth in new markets.

Financial Health and Institutional Support

NVIDIA displays solid financial traits that meet both the “S” (supply and demand) and “I” (institutional investment) parts of CAN SLIM:

• Debt-to-equity ratio of 0.08, much lower than the 2.0 maximum level
• Institutional ownership of 68.8%, under the 85% top limit that could mean limited potential
• Very good liquidity with current ratio of 4.21 and quick ratio of 3.60

The reasonable institutional ownership indicates potential for more institutional buying, while the low debt levels offer financial room to move.

Technical Strength and Market Leadership

The technical picture of NVIDIA backs the “L” (leader versus laggard) and “M” (market trend) parts of the method:

• Relative strength rating of 83.1, putting it in the top 17% of all stocks
• Trading near 52-week highs along with a solid general market
• Both short-term and long-term trends seen as positive
• Good volume traits with average daily volume over 175 million shares

According to the technical analysis report, NVIDIA displays steady results across several timeframes while showing leadership in its industry.

Complete Fundamental Assessment

NVIDIA’s fundamental analysis report shows outstanding strength across many areas:

• Profitability rating of 10/10 with industry-best margins
• Health score of 9/10 signaling few solvency issues
• Growth rating of 9/10 with notable historical and expected expansion
• Overall fundamental rating of 9/10 compared to industry competitors

The company’s mix of excellent profitability, sound financial health, and speeding growth forms a strong fundamental view that matches CAN SLIM’s focus on good growth companies.

Investment Considerations

While NVIDIA displays a solid profile for CAN SLIM investors, the present technical position shows some price changes that could indicate waiting for better times to buy. The stock’s higher valuation numbers are partly explained by its outstanding growth path and industry leading position. Investors should watch the wider market trend, as CAN SLIM highlights investing mainly during established up markets.

For investors looking for similar chances, more CAN SLIM screening results can be found using our pre-configured screener, which finds companies meeting the main conditions talked about in this review.

Disclaimer: This review is for information only and does not make up investment guidance, a suggestion, or a support of any security. Investors should do their own investigation and talk with financial experts before making investment choices. Past results do not ensure future outcomes.