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In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating NVIDIA (NASDAQ:NVDA) and its primary competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining key financial metrics, market position, and growth prospects, our aim is 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 | 53.60 | 45.75 | 28.08 | 28.72% | $31.94 | $33.85 | 55.6% |
| Broadcom Inc | 89.60 | 22.52 | 28.21 | 5.8% | $8.29 | $10.7 | 22.03% |
| Advanced Micro Devices Inc | 122.27 | 6.25 | 11.90 | 2.06% | $2.11 | $4.78 | 35.59% |
| Micron Technology Inc | 31.35 | 4.93 | 7.16 | 6.1% | $5.9 | $5.05 | 46.0% |
| Qualcomm Inc | 34.11 | 8.63 | 4.26 | -12.88% | $3.51 | $6.24 | 10.03% |
| Intel Corp | 635.50 | 1.71 | 3.14 | 3.98% | $7.85 | $5.22 | 2.78% |
| ARM Holdings PLC | 195.36 | 21.83 | 36.82 | 3.3% | $0.22 | $1.11 | 34.48% |
| Texas Instruments Inc | 29.24 | 8.77 | 8.51 | 8.21% | $2.24 | $2.72 | 14.24% |
| Analog Devices Inc | 58.14 | 3.30 | 10.96 | 1.5% | $1.33 | $1.79 | 24.57% |
| NXP Semiconductors NV | 25.29 | 5.13 | 4.33 | 6.43% | $1.11 | $1.79 | -2.37% |
| Monolithic Power Systems Inc | 24.58 | 12.87 | 17.34 | 5.12% | $0.21 | $0.41 | 18.88% |
| ASE Technology Holding Co Ltd | 30.36 | 3.24 | 1.65 | 3.56% | $32.4 | $28.88 | 5.29% |
| First Solar Inc | 20.54 | 3.19 | 5.70 | 5.19% | $0.61 | $0.61 | 79.67% |
| Credo Technology Group Holding Ltd | 227.24 | 36.22 | 50.71 | 8.67% | $0.07 | $0.15 | 273.57% |
| STMicroelectronics NV | 40.57 | 1.17 | 1.86 | 1.33% | $0.31 | $1.06 | -1.97% |
| ON Semiconductor Corp | 65.52 | 2.47 | 3.23 | 3.22% | $0.38 | $0.55 | 5.6% |
| United Microelectronics Corp | 13.56 | 1.59 | 2.40 | 4.29% | $30.07 | $17.62 | -2.25% |
| Rambus Inc | 51.27 | 9 | 17.26 | 3.84% | $0.08 | $0.14 | 22.68% |
| Skyworks Solutions Inc | 22.59 | 1.80 | 2.64 | 2.48% | $0.23 | $0.4 | 14.01% |
| Average | 95.39 | 8.59 | 12.12 | 3.46% | $5.38 | $4.96 | 33.49% |
When analyzing NVIDIA, the following trends become evident:
At 53.6, the stock's Price to Earnings ratio is 0.56x less than the industry average, suggesting favorable growth potential.
The elevated Price to Book ratio of 45.75 relative to the industry average by 5.33x suggests company might be overvalued based on its book value.
The Price to Sales ratio of 28.08, which is 2.32x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
With a Return on Equity (ROE) of 28.72% that is 25.26% 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 5.94x 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 6.82x above the industry average, indicating stronger profitability and higher earnings from its core operations.
With a revenue growth of 55.6%, which surpasses the industry average of 33.49%, the company is demonstrating robust sales expansion and gaining market share.
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
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 terms of the Debt-to-Equity ratio, NVIDIA can be assessed by comparing it to its top 4 peers, resulting in the following observations:
NVIDIA demonstrates a stronger financial position compared to its top 4 peers in the sector.
With a lower debt-to-equity ratio of 0.11, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
For NVIDIA in the Semiconductors & Semiconductor Equipment industry, the PE ratio is low compared to peers, indicating potential undervaluation. The PB and PS ratios are high, suggesting overvaluation relative to industry standards. In terms of ROE, EBITDA, gross profit, and revenue growth, NVIDIA outperforms its competitors, reflecting strong financial performance and growth prospects.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: NVDA
