In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating NVIDIA NVDA in relation to its major competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and highlight company's performance in the industry.
NVIDIA Background
Nvidia Corp is an upfront developer of graphics processing unit and a full-stack computing infrastructure company with data-center-scale offerings that are reshaping industry. Traditionally, GPU were used to enhanvce experience,now Nvidia offers AI GPUs, and also a software platform, Cuda, used for AI model development and training. The company is also expanding its data center networking solutions, helping to tie GPUs together to handle complex workloads. such as AI, model training and inference, data analytics, scientific computing, and 3D graphics, with vertical-specific optimizations to address industries ranging from healthcare and telecom to automotive and manufacturing.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| NVIDIA Corp | 36.86 | 33.34 | 20.60 | 30.42% | $25.82 | $28.72 | 77.94% |
| Taiwan Semiconductor Manufacturing Co Ltd | 24.32 | 6.65 | 9.86 | 9.05% | $596.09 | $512.38 | 38.84% |
| Broadcom Inc | 77.51 | 11.28 | 14.80 | 8.01% | $8.54 | $10.14 | 24.71% |
| Qualcomm Inc | 16.57 | 6.32 | 4.26 | 11.97% | $4.23 | $6.51 | 17.45% |
| Advanced Micro Devices Inc | 102.74 | 2.88 | 6.52 | 0.84% | $1.69 | $3.88 | 24.16% |
| Texas Instruments Inc | 34.56 | 9.67 | 10.56 | 7.02% | $1.92 | $2.31 | -1.72% |
| ARM Holdings PLC | 140.51 | 17.53 | 30.67 | 4.05% | $0.22 | $0.95 | 19.3% |
| Analog Devices Inc | 64.43 | 2.85 | 10.77 | 1.11% | $1.03 | $1.43 | -3.56% |
| Micron Technology Inc | 20.79 | 2 | 3.13 | 3.32% | $3.95 | $2.96 | 38.27% |
| Monolithic Power Systems Inc | 15.86 | 8.83 | 12.84 | 52.73% | $0.17 | $0.34 | 36.93% |
| Microchip Technology Inc | 84.93 | 4.32 | 5.52 | -0.87% | $0.21 | $0.56 | -41.89% |
| STMicroelectronics NV | 13.23 | 1.13 | 1.55 | 1.95% | $0.89 | $1.25 | -22.42% |
| ASE Technology Holding Co Ltd | 20.16 | 1.97 | 1.07 | 2.95% | $30.11 | $26.62 | 1.05% |
| United Microelectronics Corp | 12.67 | 1.57 | 2.58 | 2.28% | $29.73 | $20.43 | -0.16% |
| ON Semiconductor Corp | 11.21 | 1.95 | 2.49 | 4.37% | $0.62 | $0.78 | -14.65% |
| First Solar Inc | 10.52 | 1.70 | 3.23 | 5.05% | $0.58 | $0.57 | 30.68% |
| Skyworks Solutions Inc | 19.88 | 1.55 | 2.58 | 2.54% | $0.31 | $0.44 | -11.07% |
| Lattice Semiconductor Corp | 119.20 | 10.15 | 14.24 | 2.33% | $0.02 | $0.07 | -31.17% |
| Qorvo Inc | 258.86 | 2 | 1.84 | 1.22% | $0.14 | $0.39 | -14.67% |
| Credo Technology Group Holding Ltd | 1338.67 | 11.03 | 21.63 | 4.95% | $0.03 | $0.09 | 154.44% |
| Universal Display Corp | 30 | 4.10 | 10.26 | 2.87% | $0.06 | $0.12 | 2.51% |
| Average | 120.83 | 5.47 | 8.52 | 6.39% | $34.03 | $29.61 | 12.35% |
After a detailed analysis of NVIDIA, the following trends become apparent:
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With a Price to Earnings ratio of 36.86, which is 0.31x 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 33.34, which is 6.1x 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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The Price to Sales ratio of 20.6, which is 2.42x 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 30.42% is 24.03% above the industry average, highlighting efficient use of equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $25.82 Billion is 0.76x below the industry average, suggesting potential lower profitability or financial challenges.
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The gross profit of $28.72 Billion is 0.97x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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The company's revenue growth of 77.94% is notably higher compared to the industry average of 12.35%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its 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 assessing NVIDIA against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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Among its top 4 peers, NVIDIA has a stronger financial position with a lower debt-to-equity ratio of 0.13.
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This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively by investors.
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 funds. The low EBITDA and gross profit may indicate room for operational improvement. The high revenue growth signifies strong sales momentum within the industry sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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