In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating NVIDIA NVDA in relation to its major competitors in the Semiconductors & Semiconductor Equipment industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate 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 | 38.16 | 34.51 | 21.33 | 30.42% | $25.82 | $28.72 | 77.94% |
| Broadcom Inc | 82.85 | 12.06 | 15.82 | 8.01% | $8.54 | $10.14 | 24.71% |
| Taiwan Semiconductor Manufacturing Co Ltd | 22.52 | 6.16 | 9.13 | 9.05% | $596.09 | $512.38 | 38.84% |
| Advanced Micro Devices Inc | 95.29 | 2.69 | 6.05 | 0.84% | $1.69 | $3.88 | 24.16% |
| Qualcomm Inc | 14.95 | 5.70 | 3.84 | 11.97% | $4.23 | $6.51 | 17.45% |
| Texas Instruments Inc | 29.07 | 8.14 | 8.88 | 7.02% | $1.92 | $2.31 | -1.72% |
| ARM Holdings PLC | 136.58 | 17.04 | 29.81 | 4.05% | $0.22 | $0.95 | 19.3% |
| Analog Devices Inc | 57.36 | 2.54 | 9.59 | 1.11% | $1.03 | $1.43 | -3.56% |
| Micron Technology Inc | 17 | 1.63 | 2.56 | 3.32% | $3.95 | $2.96 | 38.27% |
| Monolithic Power Systems Inc | 14.87 | 8.28 | 12.04 | 52.73% | $0.17 | $0.34 | 36.93% |
| Microchip Technology Inc | 67.95 | 3.45 | 4.42 | -0.87% | $0.21 | $0.56 | -41.89% |
| STMicroelectronics NV | 12.37 | 1.05 | 1.45 | 1.95% | $0.89 | $1.25 | -22.42% |
| ASE Technology Holding Co Ltd | 18.96 | 1.85 | 1.01 | 2.95% | $30.11 | $26.62 | 1.05% |
| United Microelectronics Corp | 11.97 | 1.49 | 2.43 | 2.28% | $29.73 | $20.43 | -0.16% |
| ON Semiconductor Corp | 9.88 | 1.72 | 2.19 | 4.37% | $0.62 | $0.78 | -14.65% |
| First Solar Inc | 10.55 | 1.70 | 3.24 | 5.05% | $0.58 | $0.57 | 30.68% |
| Skyworks Solutions Inc | 17.66 | 1.38 | 2.29 | 2.54% | $0.31 | $0.44 | -11.07% |
| Credo Technology Group Holding Ltd | 1306 | 10.76 | 21.10 | 4.95% | $0.03 | $0.09 | 154.44% |
| Lattice Semiconductor Corp | 99.18 | 8.45 | 11.85 | 2.33% | $0.02 | $0.07 | -31.17% |
| Universal Display Corp | 25.06 | 3.42 | 8.57 | 2.87% | $0.06 | $0.12 | 2.51% |
| Qorvo Inc | 206.46 | 1.60 | 1.46 | 1.22% | $0.14 | $0.39 | -14.67% |
| Average | 112.83 | 5.06 | 7.89 | 6.39% | $34.03 | $29.61 | 12.35% |
When conducting a detailed analysis of NVIDIA, the following trends become clear:
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With a Price to Earnings ratio of 38.16, which is 0.34x 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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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 34.51 which exceeds the industry average by 6.82x.
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With a relatively high Price to Sales ratio of 21.33, which is 2.7x the industry average, the stock might be considered overvalued based on sales performance.
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The company has a higher Return on Equity (ROE) of 30.42%, which is 24.03% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $25.82 Billion, which is 0.76x below the industry average. This potentially indicates lower profitability or financial challenges.
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Compared to its industry, the company has lower gross profit of $28.72 Billion, which indicates 0.97x below the industry average, potentially indicating lower revenue after accounting for production costs.
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With a revenue growth of 77.94%, which surpasses the industry average of 12.35%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
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 light of the Debt-to-Equity ratio, a comparison between NVIDIA and its top 4 peers reveals the following information:
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When considering the debt-to-equity ratio, NVIDIA exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.13, which can be perceived as a positive aspect 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. The high ROE reflects efficient use of shareholder funds, while low EBITDA and gross profit may indicate operational challenges. The high revenue growth signifies strong top-line performance relative to industry peers in the Semiconductors & Semiconductor Equipment sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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