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 | 58.12 | 54.71 | 32.32 | 31.13% | $22.86 | $26.16 | 93.61% |
| Taiwan Semiconductor Manufacturing Co Ltd | 32.49 | 8.89 | 13.17 | 8.36% | $555.05 | $439.35 | 38.95% |
| Broadcom Inc | 186.26 | 16.64 | 22.26 | 6.49% | $7.29 | $9.0 | 51.2% |
| Advanced Micro Devices Inc | 108.88 | 3.50 | 8.28 | 1.36% | $1.55 | $3.42 | 17.57% |
| Qualcomm Inc | 19.50 | 7.37 | 5.06 | 11.46% | $3.21 | $5.78 | 18.69% |
| Texas Instruments Inc | 38.58 | 10.83 | 11.79 | 7.86% | $2.09 | $2.47 | -8.41% |
| ARM Holdings PLC | 275.36 | 29.12 | 50.06 | 1.83% | $0.11 | $0.81 | 4.71% |
| Micron Technology Inc | 30.04 | 2.50 | 4.05 | 4.07% | $4.3 | $3.35 | 84.28% |
| Analog Devices Inc | 69.62 | 3.22 | 12.08 | 1.36% | $1.12 | $1.42 | -10.06% |
| Monolithic Power Systems Inc | 78.78 | 14.49 | 16.76 | 6.35% | $0.17 | $0.34 | 30.59% |
| Microchip Technology Inc | 41.37 | 5.10 | 5.90 | 1.24% | $0.34 | $0.67 | -48.37% |
| ON Semiconductor Corp | 13.96 | 2.79 | 3.32 | 4.75% | $0.63 | $0.8 | -19.21% |
| ASE Technology Holding Co Ltd | 21.91 | 2.51 | 1.32 | 3.16% | $28.59 | $26.43 | 3.85% |
| STMicroelectronics NV | 10.61 | 1.32 | 1.71 | 1.98% | $0.74 | $1.23 | -26.63% |
| First Solar Inc | 15 | 2.45 | 4.86 | 4.22% | $0.45 | $0.45 | 10.81% |
| Skyworks Solutions Inc | 25.07 | 2.33 | 3.58 | 0.95% | $0.18 | $0.43 | -15.9% |
| United Microelectronics Corp | 9.30 | 1.30 | 2.08 | 4.0% | $29.73 | $20.43 | 5.99% |
| MACOM Technology Solutions Holdings Inc | 140.41 | 9.64 | 14.73 | 2.67% | $0.05 | $0.11 | 33.47% |
| Lattice Semiconductor Corp | 58.33 | 11.67 | 14.65 | 1.03% | $0.03 | $0.09 | -33.87% |
| Universal Display Corp | 29.67 | 4.42 | 10.94 | 4.29% | $0.08 | $0.13 | 14.57% |
| Average | 63.43 | 7.37 | 10.87 | 4.08% | $33.46 | $27.2 | 8.01% |
When closely examining NVIDIA, the following trends emerge:
-
The Price to Earnings ratio of 58.12 is 0.92x lower than the industry average, indicating potential undervaluation for the stock.
-
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 54.71 which exceeds the industry average by 7.42x.
-
The stock's relatively high Price to Sales ratio of 32.32, surpassing the industry average by 2.97x, may indicate an aspect of overvaluation in terms of sales performance.
-
The Return on Equity (ROE) of 31.13% is 27.05% above the industry average, highlighting efficient use of equity to generate profits.
-
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.
-
The company has lower gross profit of $26.16 Billion, which indicates 0.96x below the industry average. This potentially indicates lower revenue after accounting for production costs.
-
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 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 light of the Debt-to-Equity ratio, a comparison between NVIDIA and its top 4 peers reveals the following information:
-
When comparing the debt-to-equity ratio, NVIDIA is in a stronger financial position compared to its top 4 peers.
-
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 equity, while low EBITDA and gross profit may indicate operational challenges. The high revenue growth rate signals strong top-line performance compared 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.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
