Hey this is tom, and i have some incredible news for you today. We have some news from nvidia. Nvidia is one of the oldest stock on our board. We came out with a video on october 26 2020 saying that at 530 this stock is insanely, undervalued and a lot of people criticized me for saying that saying that the company was already too expensive, but i held my ground and eight months later, we hit the Target price 800 per share.

Now, of course, this stock did just split by four, so it's a 200 target price now, but it's right on the cusp of it: it's at 196.97! So it's about to hit that, and this would be a really good opportunity not to just talk about nvidia but even more importantly, talk about what an exit strategy looks like and how to implement it without any emotions, huha or nonsense. Just analytics so check this out and nvidia is probably one of my own favorite stocks. It's a company that has its hands in the best cookie jars ever in gaming and mining and in 5g and telecom, the biggest best industries right now to be in and they're an industry leader in every one of those and they've been growing like crazy. In fact, this target price got hit way before i thought it would, but this is my methodology, and this is how i run my things.

If i see a target price getting hit by stock, i automatically make a whole reevaluation process to see if there's any fundamental changes that can justify this higher price or if i can't find anything if i can't justify a higher price, i get out now. Here's the thing there's no guarantees that this system will work every time. In fact, i've screwed up before i got out way too soon on oracle, for example just recently, but i did this knowingly, because i know that over the long course this system, six or seven times out of ten, will work. So, even though i'll miss a few stocks on the average this system, this discipline will protect me against stupid.

So in this video, that's exactly what we're gon na do. We're gon na analyze, nvidia the financials, we're gon na have a whole dcf trying to figure out. If this stock can be priced higher than 200 per share, and if not i'm going to tell you straight up, i think i'm getting out of the stock. It is what it is now, let's get to it.

Okay, so i want to draw your attention to the screen right now. What you're seeing is our own spreadsheet? This is used for patreons and channel members. This is how they audit my performance. So in this chart you see every single stock.

I cover on my channel and what you see is the price on the publication date, what the price is now what my target price? What's the return of the past six months, three months and the return since publication, including what's the current upside potential of the stock? Now this is available for every single patron or channel member for our channel, so they're going to be able to audit myself and our performance. So if you want to get this file, you're welcome to join our patreon and download it for your follow-up. It's on. Google drive and it's updated daily automatically shout out to manolis for making this file one of my patreons he's a phenomenal dude good work monolith, so this file actually includes information about nvidia and, as you can see right here, nvidia was one of our first stocks.

Number six of our list very early on and, as you can see right here, we spoke about it. On october 26th, we posted the video saying that this stock is extremely undervalued at 534 dollars. Now the target price back then i gave was 800 now. Obviously, the stock has split cents, so it's 135 and 200..

Essentially, we just divided it by four, but it means that right now the stock is about to hit the target price 196 dollars. It's almost at the 200 level, which is my target price, giving us a nice return of 44 over past eight months and, as you can see right here, there's no upside left, there's literally two percent left. That means we have to reanalyze the stock and see if we can justify a higher price or we're getting out. That's the whole point of this video to show you how i do the process on my end before i make a decision on actually increasing a new target price or getting out of a stock, so check this out.

The first thing we have to take a look at is seeking alpha, because we want to look at the financials and the multiples of the company to get an idea of where it's at right. Now and after we look at all the data, we'll create a dcf with all the updated information and we'll see if we can justify a target price higher than 200, because if we're not, it means we're getting out right here, you can see the valuation 483 billion Dollars this is the market cap of the company 1.33 short interest, which means not a lot of people shorting it, which is actually very encouraging. A small dividend deal not significant, but here's where i want you to take a look at 87.7 on the year. It's a lot of run up and we have to see if it's justified.

Now, if you take a look at profitability, this company is monopoly. Money. Look at this 63, which is the gross profit margin, and this is a company, actually makes physical goods, which is insane 36 percent ebitda margin net income 27.6. These are insane numbers, it's very hard to find a company with such good numbers.

If you take it with growth, it's going to be also amazing. 63 percent, now 63 is a little bit confident used so for the next year, they're looking 36. So for our dcf. This is really important because we have to use some sort of an average between these two in our growth assumptions for the next five years, probably gon na use forty five percent just to give it a little bit more, but not too much now the ebitda growth, Almost eighty percent this year, which is insane this is a really good company.

But if you look at the valuations, even the valuations are kind of red, because it's overvalued based on standard multiples, price to sales. Right now is 25, which is 486 percent of the value. Eveda creating 12 months 237 percent of the value 68. Look at this ev sales is 25 450 over value, p gap, 2012 months 92, which is almost 200 so based on standard kind of classic evaluation methods.

This company is already overvalued, which i don't think so, but the question is: can i justify a higher price and that's not necessarily true i'll, show you why so before we run through the dcf, we have to look at the financials right now. The revenues of the company are phenomenal: 20 billion dollars per year. Look at the growth rate from 4 billion 9 years ago to 20 in nine years. This is so impressive.

This company is legitimately one of the best i've seen the balance sheet doesn't lie either because the balance sheet for this company is nothing short of phenomenal. Coral cash equivalents is 12.6 billion dollars. Now they do have a debt. Now the debt is about 6 billion, which is about half of this.

I believe, let's look at the debt right here. Long-Term debt is six billion yeah. I remember that correctly so they're net positive on debt by x2 also look at the current assets. Look at the long-term assets we're talking about 31 billion dollars in assets, remove the goodwill, which is nonsense.

It's nothing so we're talking about 26 billion in total assets. Now, if you look at total liabilities, which is about 12, if i believe correctly - yes, 12, so it's almost three times more assets than liabilities with the neutralization of the goodwill, these are like monopoly numbers. You can't make this up. This is like making a player in nba 2k and giving them all 99.

I mean this is insane so now that we got that out of the way. Let's look at the dcf and let's see if we can justify a higher valuation versus the current 483 billion target price. This is going to get interesting right now, okay, so what you're? Looking on the screen, right now is the dcf that i made for nvidia and in this dcf we assumed a 45 annual growth for the next five years at 10, discount rate 4 perpetual rate and a 12 x multiplier now check it out, and this is what We got a blended target price of ebitda and perpetual approach of 198.66, so essentially like 200 and, as you can see right here, it's a 1.36 upside really not enough skin in the game to justify getting into it now and if you're holding. I would say that this is probably the glass ceiling of the stock, at least for now.

For me, it's a gg good game, i'm out at 200. I don't think the price can be justified over 200 per share at this point, especially since we didn't use conservative assumptions for the dcf. So at this point i think 200 is the max for the stock. I'm not going to increase my target price, i'm getting at 200, but again this is just my opinion.

You have to do your own research, allegedly blah blah blah effing blah because mine might be inaccurate, might be wrong, might be the rhyming of a madman. Not a financial advisor. Do the work yourself, but i'm getting out at 200.. Now i hope you enjoyed this video.

I hope this was fun for you as much as it was for me. Patrons and channel members can get this to cf as a downloadable file within the next 24 hours, i'm going to upload it to patreon and the channel members section. So if you want to sign up, this is a good opportunity to get it done, so you just saw it. I think nvidia at this point has hit its glass ceiling.

I'm getting out. I think 200 is the top for me. I can't see any justification for a higher valuation for nvidia at this point. But again this is just my opinion.

I've been wrong before i'm, not a financial advisor, it might be. Inaccurate might be wrong, it might be the ramblings of amendment. You have to do your own research, make your own decisions, allegedly blah, blah mother, effing blah, as always a huge shout out to the channel members and the patrons. If you want to see the target price list for every stock i ever covered on the channel and how it performs, since i made the video all the way to today, good or bad, it's available for our patrons and channel members to access any given moment.

It's on the google drive join our patreon. It's five bucks per month, you'll be supporting the channel and you'll get access to that, as well as other stock, dvds stories and coverages, which i think are really interesting to do. Thank you so much for giving me a little bit of your time today. I'll see you tomorrow,.