In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating NVIDIA NVDA in relation to its major competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer valuable insights for investors and shed light on company's performance within 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 | 55.13 | 49.60 | 30.40 | 30.94% | $19.71 | $22.57 | 122.4% |
| Taiwan Semiconductor Manufacturing Co Ltd | 29.71 | 7.34 | 11.41 | 6.67% | $474.12 | $358.12 | 40.07% |
| Broadcom Inc | 67.61 | 10.44 | 16.55 | 3.02% | $5.58 | $7.78 | 42.99% |
| Advanced Micro Devices Inc | 173.20 | 4.16 | 10.24 | 0.47% | $1.12 | $2.86 | 8.88% |
| Texas Instruments Inc | 36.58 | 11.20 | 12.03 | 6.59% | $1.76 | $2.21 | -15.65% |
| Qualcomm Inc | 21.67 | 7.65 | 5.12 | 8.67% | $2.87 | $5.22 | 11.15% |
| ARM Holdings PLC | 326.09 | 24.42 | 39.54 | 4.07% | $0.23 | $0.91 | 39.11% |
| Analog Devices Inc | 69.55 | 3.26 | 11.88 | 1.11% | $1.04 | $1.31 | -24.84% |
| Intel Corp | 83.88 | 0.75 | 1.55 | -1.46% | $0.86 | $4.55 | -0.9% |
| Monolithic Power Systems Inc | 110.79 | 20.66 | 24.02 | 4.66% | $0.13 | $0.28 | 15.03% |
| Microchip Technology Inc | 32.26 | 6.78 | 6.71 | 1.98% | $0.41 | $0.74 | -45.76% |
| ON Semiconductor Corp | 17.38 | 3.92 | 4.31 | 4.11% | $0.58 | $0.78 | -17.15% |
| STMicroelectronics NV | 8.20 | 1.58 | 1.91 | 3.51% | $1.31 | $1.15 | -25.29% |
| GLOBALFOUNDRIES Inc | 31.52 | 2.26 | 3.72 | 1.38% | $0.56 | $0.4 | -11.54% |
| First Solar Inc | 19.92 | 3.29 | 6.37 | 4.94% | $0.48 | $0.5 | 24.65% |
| United Microelectronics Corp | 13.02 | 1.93 | 3.04 | 3.76% | $27.9 | $19.98 | 0.89% |
| ASE Technology Holding Co Ltd | 19.53 | 2.23 | 1.16 | 2.62% | $26.08 | $23.07 | 2.91% |
| Skyworks Solutions Inc | 22.25 | 2.71 | 3.97 | 1.9% | $0.25 | $0.36 | -15.47% |
| Universal Display Corp | 40.95 | 5.93 | 14.59 | 3.47% | $0.07 | $0.12 | 8.15% |
| MACOM Technology Solutions Holdings Inc | 110.43 | 7.30 | 11.73 | 1.88% | $0.04 | $0.1 | 28.25% |
| Cirrus Logic Inc | 26.83 | 4.17 | 4.36 | 2.3% | $0.07 | $0.19 | 17.98% |
| Lattice Semiconductor Corp | 34.60 | 9.28 | 10.42 | 3.28% | $0.04 | $0.08 | -34.72% |
| Average | 61.71 | 6.73 | 9.74 | 3.28% | $25.98 | $20.51 | 2.32% |
By analyzing NVIDIA, we can infer the following trends:
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With a Price to Earnings ratio of 55.13, which is 0.89x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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With a Price to Book ratio of 49.6, which is 7.37x 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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With a relatively high Price to Sales ratio of 30.4, which is 3.12x 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 30.94%, which is 27.66% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $19.71 Billion, which is 0.76x below the industry average, the company may face lower profitability or financial challenges.
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Compared to its industry, the company has higher gross profit of $22.57 Billion, which indicates 1.1x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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With a revenue growth of 122.4%, which surpasses the industry average of 2.32%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
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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NVIDIA demonstrates a stronger financial position compared to its top 4 peers in the sector.
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With a lower debt-to-equity ratio of 0.17, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
For NVIDIA in the Semiconductors & Semiconductor Equipment industry, the PE, PB, and PS ratios indicate that the stock is relatively undervalued compared to its peers. However, the high ROE, low EBITDA, high gross profit, and high revenue growth suggest strong financial performance and growth potential. Overall, NVIDIA appears to be a promising investment opportunity based on these key metrics in the industry sector analysis.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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