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 | 50.92 | 47.94 | 28.31 | 31.13% | $22.86 | $26.16 | 93.61% |
| Taiwan Semiconductor Manufacturing Co Ltd | 29.47 | 8.06 | 11.95 | 9.05% | $596.09 | $512.38 | 38.84% |
| Broadcom Inc | 160.74 | 14.36 | 19.21 | 6.49% | $7.29 | $9.0 | 51.2% |
| Qualcomm Inc | 19.19 | 7.22 | 4.98 | 11.46% | $3.21 | $5.78 | 18.69% |
| Advanced Micro Devices Inc | 101.04 | 3.25 | 7.68 | 1.36% | $1.55 | $3.42 | 17.57% |
| Texas Instruments Inc | 34.73 | 9.74 | 10.61 | 7.05% | $2.09 | $2.47 | -3.47% |
| ARM Holdings PLC | 247.11 | 26.13 | 44.93 | 1.83% | $0.11 | $0.81 | 4.71% |
| Analog Devices Inc | 63.88 | 2.96 | 11.08 | 1.36% | $1.12 | $1.42 | -10.06% |
| Micron Technology Inc | 25.29 | 2.10 | 3.41 | 4.07% | $4.3 | $3.35 | 84.28% |
| Microchip Technology Inc | 39.08 | 4.82 | 5.57 | 1.24% | $0.34 | $0.67 | -48.37% |
| Monolithic Power Systems Inc | 69.62 | 12.81 | 14.82 | 6.35% | $0.17 | $0.34 | 30.59% |
| ON Semiconductor Corp | 13.37 | 2.67 | 3.18 | 4.75% | $0.63 | $0.8 | -19.21% |
| STMicroelectronics NV | 10.12 | 1.26 | 1.63 | 1.98% | $0.74 | $1.23 | -26.63% |
| ASE Technology Holding Co Ltd | 19.82 | 2.27 | 1.19 | 3.16% | $28.59 | $26.43 | 3.85% |
| First Solar Inc | 13.80 | 2.26 | 4.47 | 4.22% | $0.45 | $0.45 | 10.81% |
| United Microelectronics Corp | 9.22 | 1.29 | 2.06 | 4.0% | $29.73 | $20.43 | 5.99% |
| Skyworks Solutions Inc | 24.34 | 2.28 | 3.47 | 0.95% | $0.18 | $0.43 | -15.9% |
| MACOM Technology Solutions Holdings Inc | 119.15 | 8.18 | 12.50 | 2.67% | $0.05 | $0.11 | 33.47% |
| Qorvo Inc | 306.36 | 2.40 | 2.17 | -0.51% | $0.1 | $0.45 | -5.16% |
| Lattice Semiconductor Corp | 55.13 | 11.03 | 13.85 | 1.03% | $0.03 | $0.09 | -33.87% |
| Universal Display Corp | 29.17 | 4.35 | 10.75 | 4.29% | $0.08 | $0.13 | 14.57% |
| Average | 69.53 | 6.47 | 9.48 | 3.84% | $33.84 | $29.51 | 7.59% |
By conducting an in-depth analysis of NVIDIA, we can identify the following trends:
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At 50.92, the stock's Price to Earnings ratio is 0.73x less than the industry average, suggesting favorable growth potential.
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With a Price to Book ratio of 47.94, which is 7.41x the industry average, NVIDIA might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
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The Price to Sales ratio of 28.31, which is 2.99x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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The Return on Equity (ROE) of 31.13% is 27.29% above the industry average, highlighting 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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The company has lower gross profit of $26.16 Billion, which indicates 0.89x below the industry average. This potentially indicates lower revenue after accounting for production costs.
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With a revenue growth of 93.61%, which surpasses the industry average of 7.59%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage 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:
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In terms of the debt-to-equity ratio, NVIDIA has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity 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. 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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