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In today's rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess companies. In this article, we will perform a comprehensive industry comparison, evaluating NVIDIA (NASDAQ:NVDA) against its key competitors in the Semiconductors & Semiconductor Equipment industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.
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 to run large language models. 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 | 55.62 | 47.47 | 29.13 | 28.72% | $31.94 | $33.85 | 55.6% |
| Broadcom Inc | 92.05 | 23.13 | 28.98 | 5.8% | $8.29 | $10.7 | 22.03% |
| Advanced Micro Devices Inc | 134.20 | 6.86 | 13.07 | 2.06% | $0.72 | $3.06 | 20.31% |
| Micron Technology Inc | 31.29 | 4.92 | 7.15 | 6.1% | $5.9 | $5.05 | 46.0% |
| Qualcomm Inc | 17.35 | 7.13 | 4.64 | 9.71% | $3.52 | $5.76 | 10.35% |
| Intel Corp | 1279.33 | 1.72 | 3.15 | 3.98% | $0.47 | $3.54 | 6.17% |
| ARM Holdings PLC | 242.71 | 24.22 | 41.37 | 1.88% | $0.17 | $1.02 | 12.14% |
| Texas Instruments Inc | 29.79 | 8.94 | 8.67 | 8.21% | $2.24 | $2.72 | 14.24% |
| Analog Devices Inc | 60.05 | 3.41 | 11.32 | 1.5% | $1.33 | $1.79 | 24.57% |
| NXP Semiconductors NV | 26.01 | 5.27 | 4.45 | 6.43% | $1.11 | $1.79 | -2.37% |
| ASE Technology Holding Co Ltd | 31.61 | 3.37 | 1.72 | 3.56% | $32.4 | $28.88 | 5.29% |
| Credo Technology Group Holding Ltd | 240.50 | 38.34 | 53.67 | 8.67% | $0.07 | $0.15 | 273.57% |
| First Solar Inc | 21.29 | 3.30 | 5.90 | 5.19% | $0.61 | $0.61 | 79.67% |
| STMicroelectronics NV | 41.38 | 1.20 | 1.89 | 1.33% | $0.64 | $1.06 | -1.97% |
| ON Semiconductor Corp | 68.60 | 2.59 | 3.38 | 3.22% | $0.38 | $0.55 | 5.6% |
| United Microelectronics Corp | 14.21 | 1.67 | 2.52 | 4.29% | $30.07 | $17.62 | -2.25% |
| Rambus Inc | 51.70 | 9.07 | 17.40 | 3.84% | $0.08 | $0.14 | 22.68% |
| Skyworks Solutions Inc | 23.85 | 1.90 | 2.79 | 2.48% | $0.23 | $0.4 | 14.01% |
| Average | 141.52 | 8.65 | 12.47 | 4.6% | $5.19 | $4.99 | 32.36% |
When analyzing NVIDIA, the following trends become evident:
With a Price to Earnings ratio of 55.62, which is 0.39x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 47.47 which exceeds the industry average by 5.49x.
With a relatively high Price to Sales ratio of 29.13, which is 2.34x the industry average, the stock might be considered overvalued based on sales performance.
With a Return on Equity (ROE) of 28.72% that is 24.12% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $31.94 Billion, which is 6.15x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
Compared to its industry, the company has higher gross profit of $33.85 Billion, which indicates 6.78x above the industry average, indicating stronger profitability and higher earnings from its core operations.
The company's revenue growth of 55.6% exceeds the industry average of 32.36%, indicating strong sales performance and market outperformance.
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
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.
By considering the Debt-to-Equity ratio, NVIDIA can be compared to its top 4 peers, leading to the following observations:
Among its top 4 peers, NVIDIA has a stronger financial position with a lower debt-to-equity ratio of 0.11.
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.
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, EBITDA, gross profit, and revenue growth highlight robust financial performance and growth prospects within the industry. Comparatively, NVIDIA appears to be well-positioned in the Semiconductors & Semiconductor Equipment sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: NVDA
