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 | 75.65 | 52.50 | 36.95 | 32.23% | $14.56 | $16.79 | 265.28% |
| Broadcom Inc | 49.01 | 8.70 | 14.81 | 2.81% | $4.61 | $7.38 | 34.17% |
| Advanced Micro Devices Inc | 338.85 | 5.19 | 12.87 | 1.2% | $1.22 | $2.91 | 10.16% |
| Qualcomm Inc | 24.13 | 8.19 | 5.24 | 12.4% | $3.58 | $5.62 | 4.99% |
| Intel Corp | 109.42 | 1.75 | 3.40 | 2.57% | $5.57 | $7.05 | 9.71% |
| Texas Instruments Inc | 24.45 | 9.31 | 9.04 | 8.14% | $1.98 | $2.43 | -12.7% |
| ARM Holdings PLC | 1519.37 | 25.81 | 43.96 | 1.78% | $0.18 | $0.79 | 13.81% |
| Analog Devices Inc | 34.53 | 2.70 | 8.40 | 1.3% | $1.12 | $1.47 | -22.68% |
| Microchip Technology Inc | 20.84 | 6.81 | 5.74 | 5.97% | $0.75 | $1.12 | -18.6% |
| STMicroelectronics NV | 9.86 | 2.37 | 2.40 | 6.69% | $1.5 | $1.95 | -3.21% |
| Monolithic Power Systems Inc | 76.89 | 15.99 | 18.04 | 4.85% | $0.12 | $0.25 | -1.3% |
| ON Semiconductor Corp | 15.46 | 4.15 | 4.09 | 7.37% | $0.79 | $0.94 | -4.06% |
| GLOBALFOUNDRIES Inc | 28.27 | 2.58 | 3.89 | 2.53% | $0.73 | $0.53 | 0.11% |
| ASE Technology Holding Co Ltd | 24.43 | 2.54 | 1.31 | 3.17% | $28.28 | $25.76 | 4.16% |
| United Microelectronics Corp | 9.14 | 1.82 | 2.69 | 4.72% | $29.0 | $20.46 | -24.3% |
| First Solar Inc | 21.64 | 2.68 | 5.42 | 5.38% | $0.47 | $0.5 | 15.58% |
| Skyworks Solutions Inc | 19.13 | 2.78 | 3.73 | 3.76% | $0.37 | $0.51 | -9.61% |
| Lattice Semiconductor Corp | 43.03 | 15.82 | 15.10 | 14.98% | $0.05 | $0.12 | -3.05% |
| Universal Display Corp | 39.56 | 5.49 | 13.86 | 4.36% | $0.08 | $0.12 | -6.34% |
| MACOM Technology Solutions Holdings Inc | 91.87 | 6.72 | 10.96 | 1.27% | $0.03 | $0.09 | -12.75% |
| Rambus Inc | 20.97 | 6.60 | 15.18 | 5.87% | $0.07 | $0.1 | -0.12% |
| Average | 126.04 | 6.9 | 10.01 | 5.06% | $4.03 | $4.01 | -1.3% |
After a detailed analysis of NVIDIA, the following trends become apparent:
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At 75.65, the stock's Price to Earnings ratio is 0.6x less than the industry average, suggesting favorable growth potential.
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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 52.5 which exceeds the industry average by 7.61x.
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The stock's relatively high Price to Sales ratio of 36.95, surpassing the industry average by 3.69x, may indicate an aspect of overvaluation in terms of sales performance.
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With a Return on Equity (ROE) of 32.23% that is 27.17% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $14.56 Billion, which is 3.61x above the industry average, indicating stronger profitability and robust cash flow generation.
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The company has higher gross profit of $16.79 Billion, which indicates 4.19x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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With a revenue growth of 265.28%, which surpasses the industry average of -1.3%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to 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.
When evaluating NVIDIA alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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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 0.26.
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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.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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