In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating NVIDIA NVDA and its primary competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide 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 | 52.73 | 49.64 | 29.32 | 31.13% | $22.86 | $26.16 | 93.61% |
| Taiwan Semiconductor Manufacturing Co Ltd | 35.04 | 9.23 | 13.88 | 8.36% | $555.05 | $439.35 | 38.95% |
| Broadcom Inc | 177.84 | 15.89 | 21.25 | 6.49% | $7.29 | $9.0 | 51.2% |
| Advanced Micro Devices Inc | 104.81 | 3.37 | 7.97 | 1.36% | $1.55 | $3.42 | 17.57% |
| Qualcomm Inc | 18.06 | 6.83 | 4.68 | 11.46% | $3.21 | $5.78 | 18.69% |
| Texas Instruments Inc | 34.83 | 9.90 | 10.95 | 7.86% | $2.09 | $2.47 | -8.41% |
| ARM Holdings PLC | 243.88 | 25.79 | 44.34 | 1.83% | $0.11 | $0.81 | 4.71% |
| Micron Technology Inc | 29.40 | 2.44 | 3.96 | 4.07% | $4.3 | $3.35 | 84.28% |
| Analog Devices Inc | 65.55 | 3.03 | 11.37 | 1.36% | $1.12 | $1.42 | -10.06% |
| Microchip Technology Inc | 39.02 | 4.81 | 5.56 | 1.24% | $0.34 | $0.67 | -48.37% |
| Monolithic Power Systems Inc | 67.27 | 12.38 | 14.31 | 6.35% | $0.17 | $0.34 | 30.59% |
| ASE Technology Holding Co Ltd | 21.28 | 2.44 | 1.28 | 3.16% | $28.59 | $26.43 | 3.85% |
| ON Semiconductor Corp | 13.28 | 2.65 | 3.16 | 4.75% | $0.63 | $0.8 | -19.21% |
| STMicroelectronics NV | 10.16 | 1.26 | 1.63 | 1.98% | $0.74 | $1.23 | -26.63% |
| First Solar Inc | 16.44 | 2.69 | 5.33 | 4.22% | $0.45 | $0.45 | 10.81% |
| United Microelectronics Corp | 9.99 | 1.40 | 2.24 | 4.0% | $29.73 | $20.43 | 5.99% |
| Skyworks Solutions Inc | 24.78 | 2.31 | 3.53 | 0.95% | $0.18 | $0.43 | -15.9% |
| MACOM Technology Solutions Holdings Inc | 137.28 | 9.38 | 14.40 | 2.67% | $0.05 | $0.11 | 33.47% |
| Lattice Semiconductor Corp | 55.27 | 11.06 | 13.89 | 1.03% | $0.03 | $0.09 | -33.87% |
| Universal Display Corp | 29.54 | 4.40 | 10.89 | 4.29% | $0.08 | $0.13 | 14.57% |
| Average | 59.67 | 6.91 | 10.24 | 4.08% | $33.46 | $27.2 | 8.01% |
When analyzing NVIDIA, the following trends become evident:
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A Price to Earnings ratio of 52.73 significantly below the industry average by 0.88x suggests undervaluation. This can make the stock appealing for those seeking growth.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 49.64 which exceeds the industry average by 7.18x.
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The Price to Sales ratio of 29.32, which is 2.86x 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 27.05% above the industry average, highlighting efficient use of equity to generate profits.
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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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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.
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The company's revenue growth of 93.61% exceeds the industry average of 8.01%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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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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. A high ROE reflects efficient use of shareholder equity. The low EBITDA and gross profit may indicate room for improvement in operational efficiency. The high revenue growth rate signals strong performance in capturing market share.
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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