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 | 52.73 | 49.64 | 29.32 | 31.13% | $22.86 | $26.16 | 93.61% |
| Taiwan Semiconductor Manufacturing Co Ltd | 35.04 | 9.23 | 13.88 | 8.36% | $555.05 | $439.35 | 38.95% |
| Broadcom Inc | 177.84 | 15.89 | 21.25 | 6.49% | $7.29 | $9.0 | 51.2% |
| Advanced Micro Devices Inc | 104.81 | 3.37 | 7.97 | 1.36% | $1.55 | $3.42 | 17.57% |
| Qualcomm Inc | 18.06 | 6.83 | 4.68 | 11.46% | $3.21 | $5.78 | 18.69% |
| Texas Instruments Inc | 34.83 | 9.90 | 10.95 | 7.86% | $2.09 | $2.47 | -8.41% |
| ARM Holdings PLC | 243.88 | 25.79 | 44.34 | 1.83% | $0.11 | $0.81 | 4.71% |
| Micron Technology Inc | 29.40 | 2.44 | 3.96 | 4.07% | $4.3 | $3.35 | 84.28% |
| Analog Devices Inc | 65.55 | 3.03 | 11.37 | 1.36% | $1.12 | $1.42 | -10.06% |
| Microchip Technology Inc | 39.02 | 4.81 | 5.56 | 1.24% | $0.34 | $0.67 | -48.37% |
| Monolithic Power Systems Inc | 67.27 | 12.38 | 14.31 | 6.35% | $0.17 | $0.34 | 30.59% |
| ASE Technology Holding Co Ltd | 21.28 | 2.44 | 1.28 | 3.16% | $28.59 | $26.43 | 3.85% |
| ON Semiconductor Corp | 13.28 | 2.65 | 3.16 | 4.75% | $0.63 | $0.8 | -19.21% |
| STMicroelectronics NV | 10.16 | 1.26 | 1.63 | 1.98% | $0.74 | $1.23 | -26.63% |
| First Solar Inc | 16.44 | 2.69 | 5.33 | 4.22% | $0.45 | $0.45 | 10.81% |
| United Microelectronics Corp | 9.99 | 1.40 | 2.24 | 4.0% | $29.73 | $20.43 | 5.99% |
| Skyworks Solutions Inc | 24.78 | 2.31 | 3.53 | 0.95% | $0.18 | $0.43 | -15.9% |
| MACOM Technology Solutions Holdings Inc | 137.28 | 9.38 | 14.40 | 2.67% | $0.05 | $0.11 | 33.47% |
| Lattice Semiconductor Corp | 55.27 | 11.06 | 13.89 | 1.03% | $0.03 | $0.09 | -33.87% |
| Universal Display Corp | 29.54 | 4.40 | 10.89 | 4.29% | $0.08 | $0.13 | 14.57% |
| Average | 59.67 | 6.91 | 10.24 | 4.08% | $33.46 | $27.2 | 8.01% |
Through a detailed examination of NVIDIA, we can deduce the following trends:
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At 52.73, the stock's Price to Earnings ratio is 0.88x less than the industry average, suggesting favorable growth potential.
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The elevated Price to Book ratio of 49.64 relative to the industry average by 7.18x suggests company might be overvalued based on its book value.
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With a relatively high Price to Sales ratio of 29.32, which is 2.86x 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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With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $22.86 Billion, which is 0.68x below the industry average, the company may face lower profitability or financial challenges.
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The gross profit of $26.16 Billion is 0.96x below that of its industry, suggesting potential 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 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.
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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When comparing the debt-to-equity ratio, NVIDIA is in a stronger financial position compared to its top 4 peers.
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The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.16.
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, while low EBITDA and gross profit may indicate operational challenges. The high revenue growth rate signals 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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