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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 | 56.71 | 48.40 | 29.70 | 28.72% | $31.94 | $33.85 | 55.6% |
| Broadcom Inc | 91.89 | 23.10 | 28.93 | 5.8% | $8.29 | $10.7 | 22.03% |
| Advanced Micro Devices Inc | 127.74 | 6.53 | 12.44 | 2.06% | $2.11 | $4.78 | 35.59% |
| Micron Technology Inc | 33.37 | 5.25 | 7.62 | 6.1% | $5.9 | $5.05 | 46.0% |
| Qualcomm Inc | 34.25 | 8.67 | 4.28 | -12.88% | $3.51 | $6.24 | 10.03% |
| Intel Corp | 640.83 | 1.72 | 3.17 | 3.98% | $7.85 | $5.22 | 2.78% |
| ARM Holdings PLC | 198.51 | 22.18 | 37.41 | 3.3% | $0.22 | $1.11 | 34.48% |
| Texas Instruments Inc | 29.25 | 8.78 | 8.51 | 8.21% | $2.24 | $2.72 | 14.24% |
| Analog Devices Inc | 59.03 | 3.35 | 11.13 | 1.5% | $1.33 | $1.79 | 24.57% |
| NXP Semiconductors NV | 25.36 | 5.14 | 4.34 | 6.43% | $1.11 | $1.79 | -2.37% |
| Monolithic Power Systems Inc | 25.05 | 13.11 | 17.66 | 5.12% | $0.21 | $0.41 | 18.88% |
| ASE Technology Holding Co Ltd | 30.77 | 3.28 | 1.67 | 3.56% | $32.4 | $28.88 | 5.29% |
| Credo Technology Group Holding Ltd | 236.33 | 37.67 | 52.74 | 8.67% | $0.07 | $0.15 | 273.57% |
| First Solar Inc | 20.92 | 3.25 | 5.80 | 5.19% | $0.61 | $0.61 | 79.67% |
| STMicroelectronics NV | 40.91 | 1.18 | 1.87 | 1.33% | $0.31 | $1.06 | -1.97% |
| ON Semiconductor Corp | 66.49 | 2.51 | 3.28 | 3.22% | $0.38 | $0.55 | 5.6% |
| United Microelectronics Corp | 13.63 | 1.60 | 2.41 | 4.29% | $30.07 | $17.62 | -2.25% |
| Rambus Inc | 52.64 | 9.24 | 17.72 | 3.84% | $0.08 | $0.14 | 22.68% |
| Tower Semiconductor Ltd | 56.68 | 3.86 | 7.34 | 1.69% | $0.11 | $0.08 | 5.95% |
| Average | 99.09 | 8.91 | 12.68 | 3.41% | $5.38 | $4.94 | 33.04% |
By conducting an in-depth analysis of NVIDIA, we can identify the following trends:
At 56.71, the stock's Price to Earnings ratio is 0.57x less than the industry average, suggesting favorable growth potential.
With a Price to Book ratio of 48.4, which is 5.43x 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.
With a relatively high Price to Sales ratio of 29.7, which is 2.34x the industry average, the stock might be considered overvalued based on sales performance.
The company has a higher Return on Equity (ROE) of 28.72%, which is 25.31% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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.
The company has higher gross profit of $33.85 Billion, which indicates 6.85x 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 33.04%.
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.
By evaluating NVIDIA against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
When considering the debt-to-equity ratio, NVIDIA exhibits a stronger financial position compared to its top 4 peers.
This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.11, which can be perceived as a positive aspect 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. In terms of ROE, EBITDA, gross profit, and revenue growth, NVIDIA outperforms industry peers, 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
