From Nasdaq:

Investors often rely on analyst recommendations to make stock-related decisions. The ratings from brokerage-firm-employed analysts can influence stock prices, but how important are they? Nvidia has an average brokerage recommendation of 1.23, categorizing it between Strong Buy and Buy. However, studies suggest that brokerage recommendations may not reliably guide investors to the best stocks.

Nvidia’s brokerage recommendations are largely inclined towards Buy ratings, but such ratings may be positively biased due to the analysts’ vested interests in the stocks they cover. An alternative to consider is Zacks Rank, which uses earnings estimate revisions to predict a stock’s price performance, unlike the ABR based on brokerage recommendations.

The ABR, solely based on brokerage recommendations, has limitations. It doesn’t measure up to the predictive quality of the Zacks Rank, which assesses earnings estimate revisions that correlate strongly with stock price movements. Further, the Zacks Rank displays a timelier and more balanced assessment of stocks based on brokerage analysts’ earnings estimates.

Nvidia’s earnings estimate revisions indicate growing optimism among analysts. With recent increases in the consensus estimate, the Zacks Rank values Nvidia at #2 (Buy). Therefore, the ABR, combined with other tools like Zacks Rank, can serve as a helpful guide to investors.

Zacks experts have identified a little-known chemical company, with soaring earnings estimates and high potential for growth, as a top pick for the future. The company could potentially double in value, rivalling other similar stocks that saw impressive growth. This could be an exciting opportunity for retail investors looking for high-growth stocks.



Read more: Is Nvidia (NVDA) a Buy as Wall Street Analysts Look Optimistic?