An analyst report on October 2nd upgraded NVIDIA to a "Strong Buy." The report argues the stock is undervalued. The thesis cites a forward price-to-earnings multiple of around 24x. This multiple has remained stable despite strong earnings. Analysts project 70% revenue growth for fiscal 2028.
The analysis also raised a concern over a 55% quarter-over-quarter increase in accounts receivable during the second quarter. This rise contributed to a drop in the company's free cash flow margin. The margin fell from 28.8% to 22.2% year-over-year. This signals NVIDIA is recognizing revenue faster than it collects cash.