In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating NVIDIA NVDA vis-à-vis its key competitors in the Semiconductors & Semiconductor Equipment industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight 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 | 58.06 | 54.66 | 32.28 | 31.13% | $22.86 | $26.16 | 93.61% |
| Taiwan Semiconductor Manufacturing Co Ltd | 36.04 | 9.49 | 14.28 | 8.36% | $555.05 | $439.35 | 38.95% |
| Broadcom Inc | 186.75 | 16.69 | 22.32 | 6.49% | $7.29 | $9.0 | 51.2% |
| Advanced Micro Devices Inc | 109.51 | 3.52 | 8.33 | 1.36% | $1.55 | $3.42 | 17.57% |
| Qualcomm Inc | 19.04 | 7.20 | 4.94 | 11.46% | $3.21 | $5.78 | 18.69% |
| ARM Holdings PLC | 297.46 | 31.45 | 54.08 | 1.83% | $0.11 | $0.81 | 4.71% |
| Texas Instruments Inc | 36.63 | 10.41 | 11.52 | 7.86% | $2.09 | $2.47 | -8.41% |
| Micron Technology Inc | 31.30 | 2.60 | 4.22 | 4.07% | $4.3 | $3.35 | 84.28% |
| Analog Devices Inc | 68.32 | 3.16 | 11.85 | 1.36% | $1.12 | $1.42 | -10.06% |
| Monolithic Power Systems Inc | 77.72 | 14.30 | 16.54 | 6.35% | $0.17 | $0.34 | 30.59% |
| Microchip Technology Inc | 40.61 | 5 | 5.79 | 1.24% | $0.34 | $0.67 | -48.37% |
| ASE Technology Holding Co Ltd | 22.09 | 2.53 | 1.33 | 3.16% | $28.59 | $26.43 | 3.85% |
| ON Semiconductor Corp | 13.90 | 2.78 | 3.30 | 4.75% | $0.63 | $0.8 | -19.21% |
| STMicroelectronics NV | 10.47 | 1.30 | 1.68 | 1.98% | $0.74 | $1.23 | -26.63% |
| First Solar Inc | 14.81 | 2.42 | 4.80 | 4.22% | $0.45 | $0.45 | 10.81% |
| Skyworks Solutions Inc | 24.93 | 2.32 | 3.56 | 0.95% | $0.18 | $0.43 | -15.9% |
| United Microelectronics Corp | 9.11 | 1.28 | 2.04 | 4.0% | $29.73 | $20.43 | 5.99% |
| MACOM Technology Solutions Holdings Inc | 141.70 | 9.73 | 14.86 | 2.67% | $0.05 | $0.11 | 33.47% |
| Lattice Semiconductor Corp | 59.67 | 11.94 | 14.99 | 1.03% | $0.03 | $0.09 | -33.87% |
| Universal Display Corp | 29.75 | 4.43 | 10.97 | 4.29% | $0.08 | $0.13 | 14.57% |
| Average | 64.73 | 7.5 | 11.13 | 4.08% | $33.46 | $27.2 | 8.01% |
Through a thorough examination of NVIDIA, we can discern the following trends:
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The Price to Earnings ratio of 58.06 is 0.9x lower than the industry average, indicating potential undervaluation for the stock.
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The elevated Price to Book ratio of 54.66 relative to the industry average by 7.29x suggests company might be overvalued based on its book value.
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With a relatively high Price to Sales ratio of 32.28, which is 2.9x 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 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.
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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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The company is experiencing remarkable revenue growth, with a rate of 93.61%, outperforming the industry average of 8.01%.
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.
In terms of the Debt-to-Equity ratio, NVIDIA can be assessed by comparing it to its top 4 peers, resulting in the following observations:
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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 0.16.
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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, 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 equity, while low EBITDA and gross profit may indicate operational challenges. The high revenue growth rate signals strong sales 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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