Nvidia, Inc. stock is undervalued by at least 22%, with a potential price target of $230 per share based on strong free cash flow margins. Shorting out-of-the-money puts is attractive given high premiums. NVDA closed at $188.15 on Nov. 7, down from $206.88 on Nov. 3. Quarterly FCF margin was 28.8% in Q2 2025.

Nvidia’s FCF margins in the past three quarters averaged 43.9%, with projected FCF of $112.02 billion for the next 12 months. Using a 2.0% FCF yield metric, the market cap could rise by 22% to $5,600 billion NTM. The target price is $230 per share, suggesting over 22% upside potential.

Shorting out-of-the-money NVDA puts is lucrative, with potential breakeven points at $165.40 for $170 strike price puts and $168.95 for $175 strike price puts. High premiums offer good yield and upside for new NVDA investors. High put premiums make shorting OTM puts an attractive strategy.

Read more at Barchart: Nvidia Looks 22% Undervalued Here Based on Projected FCF Margins