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 | 70.85 | 60.61 | 37.85 | 32.31% | $17.75 | $20.41 | 262.12% |
| Taiwan Semiconductor Manufacturing Co Ltd | 33.37 | 7.99 | 12.94 | 6.38% | $428.26 | $314.51 | 16.52% |
| Broadcom Inc | 69.16 | 10.68 | 16.93 | 3.02% | $5.58 | $7.78 | 42.99% |
| Advanced Micro Devices Inc | 225.75 | 4.48 | 11.15 | 0.22% | $0.9 | $2.56 | 2.24% |
| Qualcomm Inc | 25.53 | 8.73 | 5.93 | 9.79% | $3.08 | $5.28 | 1.23% |
| Texas Instruments Inc | 32.07 | 11.04 | 11.23 | 6.52% | $1.77 | $2.1 | -16.4% |
| ARM Holdings PLC | 545.97 | 31.33 | 51.15 | 4.35% | $0.06 | $0.89 | 46.6% |
| Intel Corp | 35.95 | 1.40 | 2.67 | -0.36% | $2.09 | $5.22 | 8.61% |
| Analog Devices Inc | 55.84 | 3.36 | 11.43 | 0.85% | $0.93 | $1.18 | -33.83% |
| Microchip Technology Inc | 26.30 | 7.37 | 6.57 | 2.25% | $0.47 | $0.79 | -40.62% |
| Monolithic Power Systems Inc | 100.53 | 19.42 | 22.54 | 4.45% | $0.1 | $0.25 | 1.51% |
| STMicroelectronics NV | 10.67 | 2.20 | 2.38 | 3.04% | $1.06 | $1.44 | -18.41% |
| ON Semiconductor Corp | 15.39 | 3.99 | 4.10 | 5.7% | $0.71 | $0.85 | -4.95% |
| GLOBALFOUNDRIES Inc | 36.27 | 2.86 | 4.58 | 1.19% | $0.54 | $0.39 | -15.86% |
| ASE Technology Holding Co Ltd | 22.98 | 2.74 | 1.38 | 1.94% | $23.55 | $20.87 | 1.46% |
| First Solar Inc | 22.39 | 3.31 | 6.44 | 3.48% | $0.36 | $0.35 | 44.83% |
| United Microelectronics Corp | 11.90 | 1.72 | 2.89 | 2.9% | $24.0 | $16.9 | 0.78% |
| Skyworks Solutions Inc | 22.11 | 2.96 | 4.16 | 2.91% | $0.31 | $0.42 | -9.29% |
| Universal Display Corp | 48.34 | 7.10 | 17.33 | 3.86% | $0.07 | $0.13 | 26.67% |
| Lattice Semiconductor Corp | 37.22 | 11.70 | 11.67 | 2.15% | $0.03 | $0.1 | -23.6% |
| MACOM Technology Solutions Holdings Inc | 117.92 | 7.24 | 11.89 | 1.45% | $0.04 | $0.1 | 6.98% |
| Cirrus Logic Inc | 28.33 | 4.08 | 4.35 | 2.48% | $0.07 | $0.19 | -0.27% |
| Average | 72.57 | 7.41 | 10.65 | 3.27% | $23.52 | $18.2 | 1.77% |
Through a detailed examination of NVIDIA, we can deduce the following trends:
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At 70.85, the stock's Price to Earnings ratio is 0.98x less than the industry average, suggesting favorable growth potential.
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The elevated Price to Book ratio of 60.61 relative to the industry average by 8.18x suggests company might be overvalued based on its book value.
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The Price to Sales ratio of 37.85, which is 3.55x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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The company has a higher Return on Equity (ROE) of 32.31%, which is 29.04% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $17.75 Billion is 0.75x below the industry average, suggesting potential lower profitability or financial challenges.
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Compared to its industry, the company has higher gross profit of $20.41 Billion, which indicates 1.12x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 262.12% is notably higher compared to the industry average of 1.77%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile of a company.
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 comparing NVIDIA with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
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Compared to its top 4 peers, NVIDIA has a stronger financial position indicated by its lower debt-to-equity ratio of 0.23.
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This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
Key Takeaways
For NVIDIA in the Semiconductors & Semiconductor Equipment industry, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest strong market sentiment and revenue multiples. A high ROE reflects efficient use of shareholder funds, while low EBITDA may indicate lower operating cash flow. The high gross profit margin signifies strong profitability, and high revenue growth indicates a positive sales trend compared to industry peers.
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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