In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating NVIDIA NVDA in relation to its major competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer valuable insights for investors and shed light on company's performance within 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 | 69.26 | 48.07 | 33.83 | 32.23% | $14.56 | $16.79 | 265.28% |
| Broadcom Inc | 48.10 | 8.53 | 14.54 | 2.81% | $4.61 | $7.38 | 34.17% |
| Advanced Micro Devices Inc | 290.11 | 4.45 | 11.02 | 1.2% | $1.22 | $2.91 | 10.16% |
| Qualcomm Inc | 23.30 | 7.90 | 5.06 | 12.4% | $3.58 | $5.62 | 4.99% |
| Texas Instruments Inc | 27.30 | 9.40 | 9.56 | 6.52% | $1.77 | $2.1 | -16.4% |
| Intel Corp | 87.78 | 1.42 | 2.73 | 2.57% | $5.57 | $7.05 | 9.71% |
| ARM Holdings PLC | 1184.46 | 20.12 | 34.27 | 1.78% | $0.18 | $0.79 | 13.81% |
| Analog Devices Inc | 35.35 | 2.76 | 8.60 | 1.3% | $1.12 | $1.47 | -22.68% |
| Microchip Technology Inc | 21.54 | 7.04 | 5.94 | 5.97% | $0.75 | $1.12 | -18.6% |
| STMicroelectronics NV | 9.55 | 2.29 | 2.33 | 6.69% | $1.5 | $1.95 | -3.21% |
| Monolithic Power Systems Inc | 75.38 | 15.68 | 17.68 | 4.85% | $0.12 | $0.25 | -1.3% |
| ON Semiconductor Corp | 13.57 | 3.67 | 3.59 | 7.37% | $0.79 | $0.94 | -4.06% |
| GLOBALFOUNDRIES Inc | 26.11 | 2.38 | 3.59 | 2.53% | $0.73 | $0.53 | 0.11% |
| ASE Technology Holding Co Ltd | 20.54 | 2.42 | 1.23 | 4.45% | $29.8 | $25.76 | -9.49% |
| United Microelectronics Corp | 10.48 | 1.84 | 2.81 | 3.72% | $25.78 | $17.81 | -3.7% |
| First Solar Inc | 22.61 | 2.80 | 5.66 | 5.38% | $0.47 | $0.5 | 15.58% |
| Skyworks Solutions Inc | 18.25 | 2.65 | 3.56 | 3.76% | $0.37 | $0.51 | -9.61% |
| Lattice Semiconductor Corp | 39.95 | 14.69 | 14.02 | 14.98% | $0.05 | $0.12 | -3.05% |
| Universal Display Corp | 36.93 | 5.12 | 12.94 | 4.36% | $0.08 | $0.12 | -6.34% |
| MACOM Technology Solutions Holdings Inc | 96.71 | 7.08 | 11.54 | 1.27% | $0.03 | $0.09 | -12.75% |
| Rambus Inc | 19.31 | 6.08 | 13.98 | 5.87% | $0.07 | $0.1 | -0.12% |
| Average | 105.37 | 6.42 | 9.23 | 4.99% | $3.93 | $3.86 | -1.14% |
Upon a comprehensive analysis of NVIDIA, the following trends can be discerned:
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With a Price to Earnings ratio of 69.26, which is 0.66x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 48.07 which exceeds the industry average by 7.49x.
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The stock's relatively high Price to Sales ratio of 33.83, surpassing the industry average by 3.67x, may indicate an aspect of overvaluation in terms of sales performance.
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The company has a higher Return on Equity (ROE) of 32.23%, which is 27.24% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $14.56 Billion, which is 3.7x above the industry average, indicating stronger profitability and robust cash flow generation.
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The company has higher gross profit of $16.79 Billion, which indicates 4.35x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 265.28% is notably higher compared to the industry average of -1.14%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
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 examining NVIDIA in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
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NVIDIA demonstrates a stronger financial position compared to its top 4 peers in the sector.
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With a lower debt-to-equity ratio of 0.26, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
For NVIDIA in the Semiconductors & Semiconductor Equipment industry, the PE, PB, and PS ratios indicate that the stock is relatively undervalued compared to its peers. In terms of ROE, EBITDA, gross profit, and revenue growth, NVIDIA demonstrates strong performance and growth potential, outperforming its industry counterparts.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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