In-Depth Analysis: NVIDIA Versus Competitors In Semiconductors & Semiconductor Equipment Industry

In the fast-paced and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating NVIDIA NVDA in comparison to its major competitors within the Semiconductors & Semiconductor Equipment industry. By analyzing crucial financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in the industry.

NVIDIA Background

Nvidia is a leading developer of graphics processing units. Traditionally, GPUs were used to enhance the experience on computing platforms, most notably in gaming applications on PCs. GPU use cases have since emerged as important semiconductors used in artificial intelligence. Nvidia not only offers AI GPUs, but also a software platform, Cuda, used for AI model development and training. Nvidia is also expanding its data center networking solutions, helping to tie GPUs together to handle complex workloads.

Company P/E P/B P/S ROE EBITDA (in billions) Gross Profit (in billions) Revenue Growth
NVIDIA Corp 73.72 51.16 36.01 32.23% $14.56 $16.79 265.28%
Broadcom Inc 46.91 8.32 14.18 2.81% $4.61 $7.38 28.68%
Advanced Micro Devices Inc 353.64 5.42 13.43 1.2% $1.22 $2.91 10.16%
Qualcomm Inc 24.03 8.15 5.22 12.4% $3.58 $5.62 4.99%
Intel Corp 106.88 1.71 3.32 2.57% $5.57 $7.05 9.71%
Texas Instruments Inc 24.21 9.22 8.95 8.14% $1.98 $2.43 -12.7%
ARM Holdings PLC 1583.96 26.91 45.83 1.78% $0.18 $0.79 13.81%
Analog Devices Inc 34.72 2.71 8.45 1.3% $1.12 $1.47 -22.68%
Microchip Technology Inc 20.79 6.79 5.73 5.97% $0.75 $1.12 -18.6%
Monolithic Power Systems Inc 79.11 16.45 18.56 4.85% $0.12 $0.25 -1.3%
ON Semiconductor Corp 15.78 4.24 4.18 7.37% $0.79 $0.94 -4.06%
GLOBALFOUNDRIES Inc 28.72 2.62 3.95 2.53% $0.73 $0.53 0.11%
ASE Technology Holding Co Ltd 24.03 2.50 1.29 3.17% $28.28 $25.76 4.16%
United Microelectronics Corp 9.29 1.85 2.74 4.72% $29.0 $20.46 -24.3%
Skyworks Solutions Inc 18.64 2.71 3.63 3.76% $0.37 $0.51 -9.61%
First Solar Inc 19.30 2.39 4.83 5.38% $0.47 $0.5 15.58%
Lattice Semiconductor Corp 41.36 15.21 14.51 14.98% $0.05 $0.12 -3.05%
Universal Display Corp 37.71 5.23 13.21 4.36% $0.08 $0.12 -6.34%
Rambus Inc 20.26 6.38 14.67 5.87% $0.07 $0.1 -0.12%
MACOM Technology Solutions Holdings Inc 86.55 6.33 10.32 1.27% $0.03 $0.09 -12.75%
Allegro Microsystems Inc 24.94 4.84 5.14 2.99% $0.06 $0.13 2.49%
Average 130.04 7.0 10.11 4.87% $3.95 $3.91 -1.29%

By closely studying NVIDIA, we can observe the following trends:

  • At 73.72, the stock's Price to Earnings ratio is 0.57x less than the industry average, suggesting favorable growth potential.

  • The elevated Price to Book ratio of 51.16 relative to the industry average by 7.31x suggests company might be overvalued based on its book value.

  • The Price to Sales ratio of 36.01, which is 3.56x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

  • The company has a higher Return on Equity (ROE) of 32.23%, which is 27.36% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

  • With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $14.56 Billion, which is 3.69x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.

  • The gross profit of $16.79 Billion is 4.29x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

  • The company is experiencing remarkable revenue growth, with a rate of 265.28%, outperforming the industry average of -1.29%.

Debt To Equity Ratio

debt to equity

The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

When evaluating NVIDIA alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:

  • Among its top 4 peers, NVIDIA has a stronger financial position with a lower debt-to-equity ratio of 0.26.

  • This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively by investors.

Key Takeaways

For NVIDIA, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest strong market sentiment and revenue multiples. In terms of ROE, EBITDA, gross profit, and revenue growth, NVIDIA outperforms industry peers, reflecting strong financial performance and growth prospects.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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