In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating NVIDIA NVDA against its key competitors in the Semiconductors & Semiconductor Equipment industry. By examining key financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.
NVIDIA Background
Nvidia Corp is an upfront developer of graphics processing unit and a full-stack computing infrastructure company with data-center-scale offerings that are reshaping industry. Traditionally, GPU were used to enhanvce experience,now Nvidia offers AI GPUs, and also a software platform, Cuda, used for AI model development and training. The company is also expanding its data center networking solutions, helping to tie GPUs together to handle complex workloads. such as AI, model training and inference, data analytics, scientific computing, and 3D graphics, with vertical-specific optimizations to address industries ranging from healthcare and telecom to automotive and manufacturing.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| NVIDIA Corp | 41.30 | 37.34 | 23.08 | 30.42% | $25.82 | $28.72 | 77.94% |
| Taiwan Semiconductor Manufacturing Co Ltd | 26.44 | 7.23 | 10.72 | 9.05% | $596.09 | $512.38 | 38.84% |
| Broadcom Inc | 88.54 | 12.89 | 16.91 | 8.01% | $8.54 | $10.14 | 24.71% |
| Advanced Micro Devices Inc | 113.85 | 3.20 | 7.23 | 0.84% | $1.69 | $3.88 | 24.16% |
| Qualcomm Inc | 17.27 | 6.59 | 4.44 | 11.97% | $4.23 | $6.51 | 17.45% |
| Texas Instruments Inc | 35.67 | 9.99 | 10.90 | 7.02% | $1.92 | $2.31 | -1.72% |
| ARM Holdings PLC | 164.28 | 20.50 | 35.86 | 4.05% | $0.22 | $0.95 | 19.3% |
| Micron Technology Inc | 23.19 | 2.23 | 3.49 | 3.32% | $3.95 | $2.96 | 38.27% |
| Analog Devices Inc | 67.84 | 3 | 11.34 | 1.11% | $1.03 | $1.43 | -3.56% |
| Monolithic Power Systems Inc | 17.16 | 9.55 | 13.89 | 52.73% | $0.17 | $0.34 | 36.93% |
| Microchip Technology Inc | 94.54 | 4.81 | 6.15 | -0.87% | $0.21 | $0.56 | -41.89% |
| STMicroelectronics NV | 14.65 | 1.25 | 1.72 | 1.95% | $0.89 | $1.25 | -22.42% |
| ASE Technology Holding Co Ltd | 22.56 | 2.19 | 1.20 | 2.94% | $28.59 | $26.43 | 1.35% |
| ON Semiconductor Corp | 12.58 | 2.19 | 2.79 | 4.37% | $0.62 | $0.78 | -14.65% |
| United Microelectronics Corp | 11.99 | 1.49 | 2.44 | 2.28% | $29.73 | $20.43 | -0.16% |
| First Solar Inc | 10.72 | 1.73 | 3.29 | 5.05% | $0.58 | $0.57 | 30.68% |
| Skyworks Solutions Inc | 21.24 | 1.73 | 2.76 | 2.54% | $0.31 | $0.44 | -11.07% |
| Lattice Semiconductor Corp | 144.09 | 12.27 | 17.22 | 2.33% | $0.02 | $0.07 | -31.17% |
| Credo Technology Group Holding Ltd | 1684.33 | 13.88 | 27.22 | 4.95% | $0.03 | $0.09 | 154.44% |
| Universal Display Corp | 33.02 | 4.51 | 11.30 | 2.87% | $0.06 | $0.12 | 2.51% |
| Qorvo Inc | 260.39 | 2.01 | 1.85 | 1.22% | $0.14 | $0.39 | -14.67% |
| Average | 143.22 | 6.16 | 9.64 | 6.39% | $33.95 | $29.6 | 12.37% |
By analyzing NVIDIA, we can infer the following trends:
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A Price to Earnings ratio of 41.3 significantly below the industry average by 0.29x suggests undervaluation. This can make the stock appealing for those seeking growth.
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The elevated Price to Book ratio of 37.34 relative to the industry average by 6.06x suggests company might be overvalued based on its book value.
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With a relatively high Price to Sales ratio of 23.08, which is 2.39x the industry average, the stock might be considered overvalued based on sales performance.
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With a Return on Equity (ROE) of 30.42% that is 24.03% 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 $25.82 Billion, which is 0.76x below the industry average, the company may face lower profitability or financial challenges.
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With lower gross profit of $28.72 Billion, which indicates 0.97x below the industry average, the company may experience lower revenue after accounting for production costs.
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The company's revenue growth of 77.94% is notably higher compared to the industry average of 12.37%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.
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 stands in comparison with its top 4 peers, leading to the following comparisons:
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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 0.13.
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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
The low P/E ratio suggests that NVIDIA may be 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 generating strong returns on equity and experiencing significant revenue growth, despite lower profitability margins.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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