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 | 52.02 | 48.97 | 28.92 | 31.13% | $22.86 | $26.16 | 93.61% |
| Broadcom Inc | 174.19 | 15.56 | 20.82 | 6.49% | $7.29 | $9.0 | 51.2% |
| Taiwan Semiconductor Manufacturing Co Ltd | 32.90 | 8.66 | 13.04 | 8.36% | $555.05 | $439.35 | 38.95% |
| Advanced Micro Devices Inc | 102.73 | 3.31 | 7.81 | 1.36% | $1.55 | $3.42 | 17.57% |
| Qualcomm Inc | 17.84 | 6.75 | 4.63 | 11.46% | $3.21 | $5.78 | 18.69% |
| Texas Instruments Inc | 35.97 | 10.22 | 11.31 | 7.86% | $2.09 | $2.47 | -8.41% |
| ARM Holdings PLC | 231.55 | 24.48 | 42.10 | 1.83% | $0.11 | $0.81 | 4.71% |
| Micron Technology Inc | 27.90 | 2.32 | 3.76 | 4.07% | $4.3 | $3.35 | 84.28% |
| Analog Devices Inc | 65.44 | 3.03 | 11.35 | 1.36% | $1.12 | $1.42 | -10.06% |
| Microchip Technology Inc | 39.50 | 4.87 | 5.63 | 1.24% | $0.34 | $0.67 | -48.37% |
| Monolithic Power Systems Inc | 66.50 | 12.24 | 14.15 | 6.35% | $0.17 | $0.34 | 30.59% |
| ON Semiconductor Corp | 13.69 | 2.74 | 3.25 | 4.75% | $0.63 | $0.8 | -19.21% |
| ASE Technology Holding Co Ltd | 20.58 | 2.36 | 1.24 | 3.16% | $28.59 | $26.43 | 3.85% |
| STMicroelectronics NV | 10.02 | 1.24 | 1.61 | 1.98% | $0.74 | $1.23 | -26.63% |
| First Solar Inc | 15.96 | 2.61 | 5.17 | 4.22% | $0.45 | $0.45 | 10.81% |
| United Microelectronics Corp | 10.14 | 1.42 | 2.27 | 4.0% | $29.73 | $20.43 | 5.99% |
| Skyworks Solutions Inc | 24.82 | 2.31 | 3.54 | 0.95% | $0.18 | $0.43 | -15.9% |
| MACOM Technology Solutions Holdings Inc | 130.97 | 8.95 | 13.74 | 2.67% | $0.05 | $0.11 | 33.47% |
| Lattice Semiconductor Corp | 54.31 | 10.86 | 13.64 | 1.03% | $0.03 | $0.09 | -33.87% |
| Universal Display Corp | 29.31 | 4.37 | 10.80 | 4.29% | $0.08 | $0.13 | 14.57% |
| Average | 58.12 | 6.75 | 9.99 | 4.08% | $33.46 | $27.2 | 8.01% |
Through a detailed examination of NVIDIA, we can deduce the following trends:
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The Price to Earnings ratio of 52.02 is 0.9x lower than the industry average, indicating potential undervaluation for the stock.
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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 48.97 which exceeds the industry average by 7.25x.
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With a relatively high Price to Sales ratio of 28.92, which is 2.89x the industry average, the stock might be considered overvalued based on sales performance.
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With a Return on Equity (ROE) of 31.13% that is 27.05% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $22.86 Billion, which is 0.68x below the industry average, potentially indicating lower profitability or financial challenges.
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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.
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With a revenue growth of 93.61%, which surpasses the industry average of 8.01%, the company is demonstrating robust sales expansion and gaining market share.
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 evaluating NVIDIA alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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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
The low P/E ratio suggests NVIDIA is undervalued compared to its peers in the Semiconductors & Semiconductor Equipment industry. However, the high P/B and P/S ratios indicate that the market values the company's assets and sales more highly. On the other hand, the high ROE, revenue growth, and low EBITDA and gross profit ratios suggest that NVIDIA is performing well in terms of profitability and growth compared to its industry peers.
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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