In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing NVIDIA NVDA alongside its primary competitors in the Semiconductors & Semiconductor Equipment industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to 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 | 34.52 | 31.22 | 19.29 | 30.42% | $25.82 | $28.72 | 77.94% |
| Broadcom Inc | 79.16 | 11.52 | 15.12 | 8.01% | $8.54 | $10.14 | 24.71% |
| Qualcomm Inc | 14.74 | 5.62 | 3.79 | 11.97% | $4.23 | $6.51 | 17.45% |
| Advanced Micro Devices Inc | 87.50 | 2.47 | 5.56 | 0.84% | $1.69 | $3.88 | 24.16% |
| Texas Instruments Inc | 28.55 | 7.99 | 8.72 | 7.02% | $1.92 | $2.31 | -1.72% |
| ARM Holdings PLC | 132.54 | 16.54 | 28.93 | 4.05% | $0.22 | $0.95 | 19.3% |
| Analog Devices Inc | 56.32 | 2.49 | 9.41 | 1.11% | $1.03 | $1.43 | -3.56% |
| Micron Technology Inc | 16.46 | 1.58 | 2.48 | 3.32% | $3.95 | $2.96 | 38.27% |
| Monolithic Power Systems Inc | 14.31 | 7.97 | 11.58 | 52.73% | $0.17 | $0.34 | 36.93% |
| Microchip Technology Inc | 67.65 | 3.44 | 4.40 | -0.87% | $0.21 | $0.56 | -41.89% |
| STMicroelectronics NV | 12.20 | 1.04 | 1.43 | 1.95% | $0.89 | $1.25 | -22.42% |
| ASE Technology Holding Co Ltd | 18.26 | 1.78 | 0.97 | 2.95% | $30.11 | $26.62 | 1.05% |
| United Microelectronics Corp | 11.85 | 1.47 | 2.41 | 2.28% | $29.73 | $20.43 | -0.16% |
| ON Semiconductor Corp | 9.54 | 1.66 | 2.12 | 4.37% | $0.62 | $0.78 | -14.65% |
| First Solar Inc | 10.65 | 1.72 | 3.27 | 5.05% | $0.58 | $0.57 | 30.68% |
| Skyworks Solutions Inc | 17.22 | 1.34 | 2.24 | 2.54% | $0.31 | $0.44 | -11.07% |
| Credo Technology Group Holding Ltd | 1221 | 10.06 | 19.73 | 4.95% | $0.03 | $0.09 | 154.44% |
| Lattice Semiconductor Corp | 93.59 | 7.97 | 11.18 | 2.33% | $0.02 | $0.07 | -31.17% |
| Universal Display Corp | 24.51 | 3.35 | 8.39 | 2.87% | $0.06 | $0.12 | 2.51% |
| Qorvo Inc | 205.82 | 1.59 | 1.46 | 1.22% | $0.14 | $0.39 | -14.67% |
| Average | 111.68 | 4.82 | 7.54 | 6.25% | $4.44 | $4.2 | 10.96% |
After examining NVIDIA, the following trends can be inferred:
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At 34.52, the stock's Price to Earnings ratio is 0.31x less than the industry average, suggesting favorable growth potential.
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The elevated Price to Book ratio of 31.22 relative to the industry average by 6.48x suggests company might be overvalued based on its book value.
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The stock's relatively high Price to Sales ratio of 19.29, surpassing the industry average by 2.56x, may indicate an aspect of overvaluation in terms of sales performance.
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The Return on Equity (ROE) of 30.42% is 24.17% above the industry average, highlighting efficient use of equity to generate profits.
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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $25.82 Billion, which is 5.82x above the industry average, implying stronger profitability and robust cash flow generation.
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The company has higher gross profit of $28.72 Billion, which indicates 6.84x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 77.94% is notably higher compared to the industry average of 10.96%, showcasing exceptional sales performance and strong demand for its products or services.
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 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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NVIDIA has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.13.
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This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.
Key Takeaways
For NVIDIA in the Semiconductors & Semiconductor Equipment industry, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest strong market sentiment and revenue multiples. In terms of ROE, EBITDA, gross profit, and revenue growth, NVIDIA outperforms its industry peers, reflecting strong financial performance and growth prospects.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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