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 | 56.05 | 50.54 | 28.94 | 23.01% | $22.58 | $26.67 | 69.18% |
| Broadcom Inc | 105.37 | 19.51 | 24.44 | 7.12% | $8.02 | $10.2 | 20.16% |
| Advanced Micro Devices Inc | 118.34 | 4.54 | 9.54 | 1.23% | $1.59 | $3.74 | 35.9% |
| Qualcomm Inc | 16.21 | 6.29 | 4.22 | 10.3% | $3.67 | $6.04 | 16.93% |
| ARM Holdings PLC | 213.32 | 24.78 | 42.44 | 3.17% | $0.46 | $1.21 | 33.73% |
| Texas Instruments Inc | 35.17 | 10.29 | 10.63 | 7.89% | $1.85 | $2.31 | 9.31% |
| Micron Technology Inc | 20.13 | 2.46 | 3.74 | 3.79% | $4.33 | $3.51 | 36.56% |
| Analog Devices Inc | 61.51 | 3.21 | 11.50 | 1.63% | $1.2 | $1.61 | 22.28% |
| Monolithic Power Systems Inc | 19.02 | 10.45 | 14.52 | 4.17% | $0.18 | $0.35 | 39.24% |
| STMicroelectronics NV | 38.74 | 1.35 | 2.07 | 0.32% | $0.51 | $0.84 | -27.36% |
| ON Semiconductor Corp | 38.50 | 2.89 | 3.57 | -5.78% | $-0.37 | $0.29 | -22.39% |
| ASE Technology Holding Co Ltd | 20.55 | 2.17 | 1.12 | 2.39% | $27.16 | $24.89 | 11.56% |
| First Solar Inc | 15.35 | 2.37 | 4.57 | 2.59% | $0.35 | $0.34 | 6.35% |
| United Microelectronics Corp | 11.55 | 1.38 | 2.26 | 2.06% | $23.86 | $15.45 | 5.91% |
| Credo Technology Group Holding Ltd | 348.86 | 25.48 | 41.96 | 5.63% | $0.04 | $0.11 | 179.73% |
| Skyworks Solutions Inc | 28.26 | 1.83 | 2.95 | 1.11% | $0.22 | $0.39 | -8.87% |
| Qorvo Inc | 148.60 | 2.36 | 2.21 | 0.93% | $0.11 | $0.37 | -7.6% |
| Lattice Semiconductor Corp | 141.22 | 10.15 | 14.78 | 0.71% | $0.02 | $0.08 | -14.68% |
| Universal Display Corp | 31.08 | 4.28 | 10.99 | 3.93% | $0.08 | $0.13 | 0.62% |
| Average | 78.43 | 7.54 | 11.53 | 2.96% | $4.07 | $3.99 | 18.74% |
Through a detailed examination of NVIDIA, we can deduce the following trends:
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At 56.05, the stock's Price to Earnings ratio is 0.71x less than the industry average, suggesting favorable growth potential.
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The elevated Price to Book ratio of 50.54 relative to the industry average by 6.7x suggests company might be overvalued based on its book value.
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With a relatively high Price to Sales ratio of 28.94, which is 2.51x the industry average, the stock might be considered overvalued based on sales performance.
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The Return on Equity (ROE) of 23.01% is 20.05% 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 $22.58 Billion, which is 5.55x above the industry average, implying stronger profitability and robust cash flow generation.
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The company has higher gross profit of $26.67 Billion, which indicates 6.68x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company is experiencing remarkable revenue growth, with a rate of 69.18%, outperforming the industry average of 18.74%.
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.
When assessing NVIDIA against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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NVIDIA exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.12.
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This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for 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. On the other hand, the high ROE, EBITDA, gross profit, and revenue growth suggest that NVIDIA is performing exceptionally well in terms of profitability and operational efficiency within the industry sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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