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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 | 53.16 | 45.37 | 27.85 | 28.72% | $31.94 | $33.85 | 55.6% |
| Broadcom Inc | 87.86 | 22.08 | 27.66 | 5.8% | $8.29 | $10.7 | 22.03% |
| Taiwan Semiconductor Manufacturing Co Ltd | 28.54 | 8.97 | 12.35 | 9.44% | $691.11 | $588.54 | 30.31% |
| Advanced Micro Devices Inc | 125.93 | 6.44 | 12.26 | 2.06% | $2.11 | $4.78 | 35.59% |
| Micron Technology Inc | 31.88 | 5.01 | 7.28 | 6.1% | $5.9 | $5.05 | 46.0% |
| Qualcomm Inc | 33.28 | 8.42 | 4.16 | -12.88% | $3.51 | $6.24 | 10.03% |
| Intel Corp | 578.50 | 1.56 | 2.86 | 3.98% | $7.85 | $5.22 | 2.78% |
| ARM Holdings PLC | 179.82 | 20.09 | 33.89 | 3.3% | $0.22 | $1.11 | 34.48% |
| Texas Instruments Inc | 28.23 | 8.47 | 8.22 | 8.21% | $2.24 | $2.72 | 14.24% |
| Analog Devices Inc | 58.51 | 3.32 | 11.03 | 1.5% | $1.33 | $1.79 | 24.57% |
| NXP Semiconductors NV | 23.55 | 4.77 | 4.03 | 6.43% | $1.11 | $1.79 | -2.37% |
| Monolithic Power Systems Inc | 23.01 | 12.04 | 16.23 | 5.12% | $0.21 | $0.41 | 18.88% |
| ASE Technology Holding Co Ltd | 28.30 | 3.02 | 1.54 | 3.56% | $32.4 | $28.88 | 5.29% |
| First Solar Inc | 19.46 | 3.02 | 5.40 | 5.19% | $0.61 | $0.61 | 79.67% |
| Credo Technology Group Holding Ltd | 202.19 | 32.23 | 45.12 | 8.67% | $0.07 | $0.15 | 273.57% |
| STMicroelectronics NV | 39.21 | 1.13 | 1.79 | 1.33% | $0.31 | $1.06 | -1.97% |
| ON Semiconductor Corp | 63.04 | 2.38 | 3.11 | 3.22% | $0.38 | $0.55 | 5.6% |
| United Microelectronics Corp | 12.74 | 1.50 | 2.25 | 4.29% | $30.07 | $17.62 | -2.25% |
| Tower Semiconductor Ltd | 55.13 | 3.76 | 7.14 | 1.9% | $0.13 | $0.09 | 6.79% |
| Rambus Inc | 43.42 | 7.62 | 14.62 | 3.84% | $0.08 | $0.14 | 22.68% |
| Skyworks Solutions Inc | 20.51 | 1.63 | 2.40 | 2.48% | $0.25 | $0.45 | 7.34% |
| Average | 84.16 | 7.87 | 11.17 | 3.68% | $39.41 | $33.89 | 31.66% |
After examining NVIDIA, the following trends can be inferred:
At 53.16, the stock's Price to Earnings ratio is 0.63x less than the industry average, suggesting favorable growth potential.
The elevated Price to Book ratio of 45.37 relative to the industry average by 5.76x suggests company might be overvalued based on its book value.
The stock's relatively high Price to Sales ratio of 27.85, surpassing the industry average by 2.49x, may indicate an aspect of overvaluation in terms of sales performance.
The Return on Equity (ROE) of 28.72% is 25.04% above the industry average, highlighting efficient use of equity to generate profits.
The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $31.94 Billion, which is 0.81x below the industry average. This potentially indicates lower profitability or financial challenges.
The company has lower gross profit of $33.85 Billion, which indicates 1.0x below the industry average. This potentially indicates lower revenue after accounting for production costs.
With a revenue growth of 55.6%, which surpasses the industry average of 31.66%, the company is demonstrating robust sales expansion and gaining market share.
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
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:
Compared to its top 4 peers, NVIDIA has a stronger financial position indicated by its lower debt-to-equity ratio of 0.11.
This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute 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 reflects efficient use of shareholder equity, while low EBITDA and gross profit may indicate operational challenges. The high revenue growth signifies strong top-line performance relative to industry peers in the Semiconductors & Semiconductor Equipment sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: NVDA
