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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 (NASDAQ: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 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 | 53.58 | 45.73 | 28.07 | 28.72% | $31.94 | $33.85 | 55.6% |
| Broadcom Inc | 91.18 | 22.92 | 28.70 | 5.8% | $8.29 | $10.7 | 22.03% |
| Advanced Micro Devices Inc | 124.45 | 6.37 | 12.12 | 2.06% | $2.11 | $4.78 | 35.59% |
| Micron Technology Inc | 31.40 | 4.94 | 7.17 | 6.1% | $5.9 | $5.05 | 46.0% |
| Qualcomm Inc | 34.57 | 8.75 | 4.32 | -12.88% | $3.51 | $6.24 | 10.03% |
| Intel Corp | 620.67 | 1.67 | 3.07 | 3.98% | $0.47 | $3.54 | 6.17% |
| ARM Holdings PLC | 202.88 | 22.67 | 38.24 | 3.3% | $0.22 | $1.11 | 34.48% |
| Texas Instruments Inc | 29.40 | 8.82 | 8.55 | 8.21% | $2.24 | $2.72 | 14.24% |
| Analog Devices Inc | 59.26 | 3.36 | 11.17 | 1.5% | $1.33 | $1.79 | 24.57% |
| NXP Semiconductors NV | 25.52 | 5.17 | 4.37 | 6.43% | $1.11 | $1.79 | -2.37% |
| Monolithic Power Systems Inc | 24.58 | 12.86 | 17.33 | 5.12% | $0.21 | $0.41 | 18.88% |
| ASE Technology Holding Co Ltd | 30.66 | 3.27 | 1.67 | 3.56% | $32.4 | $28.88 | 5.29% |
| First Solar Inc | 20.87 | 3.24 | 5.79 | 5.19% | $0.61 | $0.61 | 79.67% |
| Credo Technology Group Holding Ltd | 226.03 | 36.03 | 50.44 | 8.67% | $0.07 | $0.15 | 273.57% |
| STMicroelectronics NV | 40.76 | 1.18 | 1.86 | 1.33% | $0.31 | $1.06 | -1.97% |
| ON Semiconductor Corp | 66.85 | 2.52 | 3.30 | 3.22% | $0.38 | $0.55 | 5.6% |
| United Microelectronics Corp | 13.39 | 1.57 | 2.37 | 4.29% | $30.07 | $17.62 | -2.25% |
| Rambus Inc | 50.72 | 8.90 | 17.08 | 3.84% | $0.08 | $0.14 | 22.68% |
| Skyworks Solutions Inc | 22.94 | 1.82 | 2.68 | 2.48% | $0.23 | $0.4 | 14.01% |
| Average | 95.34 | 8.67 | 12.24 | 3.46% | $4.97 | $4.86 | 33.68% |
Upon analyzing NVIDIA, the following trends can be observed:
A Price to Earnings ratio of 53.58 significantly below the industry average by 0.56x suggests undervaluation. This can make the stock appealing for those seeking growth.
With a Price to Book ratio of 45.73, which is 5.27x 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.
The Price to Sales ratio of 28.07, which is 2.29x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
The Return on Equity (ROE) of 28.72% is 25.26% above the industry average, highlighting efficient use of equity to generate profits.
The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $31.94 Billion, which is 6.43x above the industry average, indicating stronger profitability and robust cash flow generation.
The company has higher gross profit of $33.85 Billion, which indicates 6.97x above the industry average, indicating stronger profitability and higher earnings from its core operations.
The company is experiencing remarkable revenue growth, with a rate of 55.6%, outperforming the industry average of 33.68%.
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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:
NVIDIA is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.11.
This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
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. In terms of ROE, EBITDA, gross profit, and revenue growth, NVIDIA outperforms industry peers, reflecting robust financial performance and growth prospects.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: NVDA
