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 | 54.09 | 50.92 | 30.07 | 31.13% | $22.86 | $26.16 | 93.61% |
| Broadcom Inc | 187.40 | 16.74 | 22.40 | 6.49% | $7.29 | $9.0 | 51.2% |
| Taiwan Semiconductor Manufacturing Co Ltd | 32.58 | 8.58 | 12.91 | 8.36% | $555.05 | $439.35 | 38.95% |
| Advanced Micro Devices Inc | 110.79 | 3.57 | 8.42 | 1.36% | $1.55 | $3.42 | 17.57% |
| Qualcomm Inc | 17.59 | 6.65 | 4.56 | 11.46% | $3.21 | $5.78 | 18.69% |
| Texas Instruments Inc | 35.54 | 10.10 | 11.17 | 7.86% | $2.09 | $2.47 | -8.41% |
| ARM Holdings PLC | 213.60 | 22.59 | 38.83 | 1.83% | $0.11 | $0.81 | 4.71% |
| Analog Devices Inc | 66.16 | 3.06 | 11.48 | 1.36% | $1.12 | $1.42 | -10.06% |
| Micron Technology Inc | 25.40 | 2.11 | 3.42 | 4.07% | $4.3 | $3.35 | 84.28% |
| Microchip Technology Inc | 40.51 | 4.99 | 5.77 | 1.24% | $0.34 | $0.67 | -48.37% |
| Monolithic Power Systems Inc | 69.08 | 12.71 | 14.70 | 6.35% | $0.17 | $0.34 | 30.59% |
| ON Semiconductor Corp | 16.38 | 3.27 | 3.89 | 4.75% | $0.63 | $0.8 | -19.21% |
| STMicroelectronics NV | 10.49 | 1.30 | 1.68 | 1.98% | $0.74 | $1.23 | -26.63% |
| ASE Technology Holding Co Ltd | 20.74 | 2.38 | 1.25 | 3.16% | $28.59 | $26.43 | 3.85% |
| First Solar Inc | 15.73 | 2.57 | 5.10 | 4.22% | $0.45 | $0.45 | 10.81% |
| United Microelectronics Corp | 10.58 | 1.48 | 2.37 | 4.0% | $29.73 | $20.43 | 5.99% |
| Skyworks Solutions Inc | 24.43 | 2.28 | 3.48 | 0.95% | $0.18 | $0.43 | -15.9% |
| MACOM Technology Solutions Holdings Inc | 128.40 | 8.77 | 13.47 | 2.67% | $0.05 | $0.11 | 33.47% |
| Lattice Semiconductor Corp | 57.80 | 11.56 | 14.52 | 1.03% | $0.03 | $0.09 | -33.87% |
| Universal Display Corp | 30.06 | 4.48 | 11.08 | 4.29% | $0.08 | $0.13 | 14.57% |
| Average | 58.59 | 6.8 | 10.03 | 4.08% | $33.46 | $27.2 | 8.01% |
By thoroughly analyzing NVIDIA, we can discern the following trends:
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A Price to Earnings ratio of 54.09 significantly below the industry average by 0.92x suggests undervaluation. This can make the stock appealing for those seeking growth.
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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 50.92 which exceeds the industry average by 7.49x.
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With a relatively high Price to Sales ratio of 30.07, which is 3.0x the industry average, the stock might be considered overvalued based on sales performance.
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The company has a higher Return on Equity (ROE) of 31.13%, which is 27.05% 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 $22.86 Billion is 0.68x below the industry average, suggesting potential lower profitability or financial challenges.
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Compared to its industry, the company has lower gross profit of $26.16 Billion, which indicates 0.96x below the industry average, potentially indicating lower revenue after accounting for production costs.
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The company's revenue growth of 93.61% exceeds the industry average of 8.01%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.
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.
By analyzing NVIDIA in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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NVIDIA is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.16.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
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. The high ROE reflects efficient use of shareholder funds, while low EBITDA and gross profit may indicate operational challenges. The high revenue growth signifies strong top-line performance relative to industry peers in the Semiconductors & Semiconductor Equipment sector.
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.
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