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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 | 53.24 | 45.44 | 27.88 | 28.72% | $31.94 | $33.85 | 55.6% |
| Broadcom Inc | 87.17 | 21.91 | 27.44 | 5.8% | $8.29 | $10.7 | 22.03% |
| Advanced Micro Devices Inc | 129.82 | 6.64 | 12.64 | 2.06% | $2.11 | $4.78 | 35.59% |
| Micron Technology Inc | 31.22 | 4.91 | 7.13 | 6.1% | $5.9 | $5.05 | 46.0% |
| Qualcomm Inc | 34.83 | 8.81 | 4.35 | -12.88% | $3.51 | $6.24 | 10.03% |
| Intel Corp | 598.50 | 1.61 | 2.96 | 3.98% | $7.85 | $5.22 | 2.78% |
| ARM Holdings PLC | 179.88 | 20.10 | 33.90 | 3.3% | $0.22 | $1.11 | 34.48% |
| Texas Instruments Inc | 29.55 | 8.87 | 8.60 | 8.21% | $2.24 | $2.72 | 14.24% |
| Analog Devices Inc | 60.44 | 3.43 | 11.39 | 1.5% | $1.33 | $1.79 | 24.57% |
| NXP Semiconductors NV | 24.87 | 5.04 | 4.26 | 6.43% | $1.11 | $1.79 | -2.37% |
| Monolithic Power Systems Inc | 23.71 | 12.41 | 16.72 | 5.12% | $0.21 | $0.41 | 18.88% |
| ASE Technology Holding Co Ltd | 29.35 | 3.13 | 1.59 | 3.56% | $32.4 | $28.88 | 5.29% |
| First Solar Inc | 19.69 | 3.05 | 5.46 | 5.19% | $0.61 | $0.61 | 79.67% |
| Credo Technology Group Holding Ltd | 198.54 | 31.65 | 44.31 | 8.67% | $0.07 | $0.15 | 273.57% |
| STMicroelectronics NV | 41 | 1.18 | 1.88 | 1.33% | $0.31 | $1.06 | -1.97% |
| ON Semiconductor Corp | 65.93 | 2.49 | 3.25 | 3.22% | $0.38 | $0.55 | 5.6% |
| United Microelectronics Corp | 13.08 | 1.54 | 2.32 | 4.29% | $30.07 | $17.62 | -2.25% |
| Tower Semiconductor Ltd | 57.27 | 3.90 | 7.42 | 1.9% | $0.13 | $0.09 | 6.79% |
| Skyworks Solutions Inc | 22.13 | 1.76 | 2.59 | 2.48% | $0.25 | $0.45 | 7.34% |
| Rambus Inc | 43.98 | 7.72 | 14.81 | 3.84% | $0.08 | $0.14 | 22.68% |
| Average | 89.0 | 7.9 | 11.21 | 3.37% | $5.11 | $4.7 | 31.73% |
After thoroughly examining NVIDIA, the following trends can be inferred:
The stock's Price to Earnings ratio of 53.24 is lower than the industry average by 0.6x, suggesting potential value in the eyes of market participants.
With a Price to Book ratio of 45.44, which is 5.75x 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 stock's relatively high Price to Sales ratio of 27.88, surpassing the industry average by 2.49x, may indicate an aspect of overvaluation in terms of sales performance.
The company has a higher Return on Equity (ROE) of 28.72%, which is 25.35% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $31.94 Billion, which is 6.25x above the industry average, indicating stronger profitability and robust cash flow generation.
With higher gross profit of $33.85 Billion, which indicates 7.2x above the industry average, the company demonstrates 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 31.73%.
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.
When assessing NVIDIA against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
In terms of the debt-to-equity ratio, NVIDIA has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.11.
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
