In the dynamic 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 and its primary competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide 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 | 53.32 | 50.20 | 29.65 | 31.13% | $22.86 | $26.16 | 93.61% |
| Taiwan Semiconductor Manufacturing Co Ltd | 30.70 | 8.08 | 12.16 | 8.36% | $555.05 | $439.35 | 38.95% |
| Broadcom Inc | 138.78 | 12.22 | 17.01 | -2.77% | $6.39 | $8.36 | 47.27% |
| Advanced Micro Devices Inc | 113.04 | 3.64 | 8.60 | 1.36% | $1.55 | $3.42 | 17.57% |
| Qualcomm Inc | 17.50 | 6.62 | 4.54 | 11.46% | $3.21 | $5.78 | 18.69% |
| Texas Instruments Inc | 35.35 | 10.05 | 11.12 | 7.86% | $2.09 | $2.47 | -8.41% |
| ARM Holdings PLC | 226.97 | 24 | 41.26 | 1.83% | $0.11 | $0.81 | 4.71% |
| Micron Technology Inc | 140.14 | 2.42 | 4.37 | 1.99% | $3.63 | $2.74 | 93.27% |
| Analog Devices Inc | 65.73 | 3.04 | 11.41 | 1.36% | $1.12 | $1.42 | -10.06% |
| Microchip Technology Inc | 43 | 5.30 | 6.13 | 1.24% | $0.34 | $0.67 | -48.37% |
| Monolithic Power Systems Inc | 67.12 | 12.35 | 14.28 | 6.35% | $0.17 | $0.34 | 30.59% |
| ON Semiconductor Corp | 16.46 | 3.29 | 3.91 | 4.75% | $0.63 | $0.8 | -19.21% |
| STMicroelectronics NV | 10.83 | 1.35 | 1.74 | 1.98% | $0.74 | $1.23 | -26.63% |
| First Solar Inc | 17.48 | 2.86 | 5.67 | 4.22% | $0.45 | $0.45 | 10.81% |
| ASE Technology Holding Co Ltd | 19.48 | 2.23 | 1.17 | 3.16% | $28.59 | $26.43 | 3.85% |
| United Microelectronics Corp | 10.34 | 1.45 | 2.32 | 4.0% | $29.73 | $20.43 | 5.99% |
| Skyworks Solutions Inc | 23.75 | 2.21 | 3.39 | 0.95% | $0.18 | $0.43 | -15.9% |
| MACOM Technology Solutions Holdings Inc | 129.81 | 8.68 | 13.61 | 2.67% | $0.05 | $0.11 | 33.47% |
| Lattice Semiconductor Corp | 58.31 | 11.66 | 14.65 | 1.03% | $0.03 | $0.09 | -33.87% |
| Universal Display Corp | 31.18 | 4.65 | 11.50 | 4.29% | $0.08 | $0.13 | 14.57% |
| Average | 62.95 | 6.64 | 9.94 | 3.48% | $33.38 | $27.13 | 8.28% |
When closely examining NVIDIA, the following trends emerge:
-
With a Price to Earnings ratio of 53.32, which is 0.85x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
-
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 50.2 which exceeds the industry average by 7.56x.
-
The stock's relatively high Price to Sales ratio of 29.65, surpassing the industry average by 2.98x, may indicate an aspect of overvaluation in terms of sales performance.
-
With a Return on Equity (ROE) of 31.13% that is 27.65% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
-
The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $22.86 Billion, which is 0.68x below the industry average. This potentially indicates lower profitability or financial challenges.
-
With lower gross profit of $26.16 Billion, which indicates 0.96x below the industry average, the company may experience lower revenue after accounting for production costs.
-
The company's revenue growth of 93.61% exceeds the industry average of 8.28%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
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:
-
NVIDIA exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.16.
-
This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for 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. A high ROE reflects efficient use of shareholder funds. The low EBITDA and gross profit may indicate operational challenges. The high revenue growth signifies strong top-line performance relative to industry peers in Semiconductors & Semiconductor Equipment.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
