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Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating NVIDIA (NASDAQ:NVDA) in comparison to its major competitors within the Semiconductors & Semiconductor Equipment industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in 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 | 51.67 | 44.10 | 27.06 | 28.72% | $31.94 | $33.85 | 55.6% |
| Broadcom Inc | 87.31 | 21.94 | 27.49 | 5.8% | $8.29 | $10.7 | 22.03% |
| Taiwan Semiconductor Manufacturing Co Ltd | 28.12 | 8.84 | 12.17 | 9.44% | $691.11 | $588.54 | 30.31% |
| Advanced Micro Devices Inc | 120.57 | 6.17 | 11.74 | 2.06% | $2.11 | $4.78 | 35.59% |
| Micron Technology Inc | 30.11 | 4.74 | 6.88 | 6.1% | $5.9 | $5.05 | 46.0% |
| Qualcomm Inc | 32.95 | 8.34 | 4.12 | -12.88% | $3.51 | $6.24 | 10.03% |
| Intel Corp | 572.17 | 1.54 | 2.83 | 3.98% | $7.85 | $5.22 | 2.78% |
| ARM Holdings PLC | 174.41 | 19.49 | 32.87 | 3.3% | $0.22 | $1.11 | 34.48% |
| Texas Instruments Inc | 28.66 | 8.60 | 8.34 | 8.21% | $2.24 | $2.72 | 14.24% |
| Analog Devices Inc | 58.56 | 3.32 | 11.04 | 1.5% | $1.33 | $1.79 | 24.57% |
| NXP Semiconductors NV | 23.31 | 4.73 | 3.99 | 6.43% | $1.11 | $1.79 | -2.37% |
| Monolithic Power Systems Inc | 21.98 | 11.51 | 15.50 | 5.12% | $0.21 | $0.41 | 18.88% |
| ASE Technology Holding Co Ltd | 28.04 | 2.99 | 1.52 | 3.56% | $32.4 | $28.88 | 5.29% |
| First Solar Inc | 19.35 | 3 | 5.37 | 5.19% | $0.61 | $0.61 | 79.67% |
| Credo Technology Group Holding Ltd | 193.83 | 30.90 | 43.26 | 8.67% | $0.07 | $0.15 | 273.57% |
| STMicroelectronics NV | 38.52 | 1.11 | 1.76 | 1.33% | $0.31 | $1.06 | -1.97% |
| ON Semiconductor Corp | 62.41 | 2.36 | 3.08 | 3.22% | $0.38 | $0.55 | 5.6% |
| United Microelectronics Corp | 12.81 | 1.51 | 2.27 | 4.29% | $30.07 | $17.62 | -2.25% |
| Tower Semiconductor Ltd | 55.77 | 3.80 | 7.22 | 1.9% | $0.13 | $0.09 | 6.79% |
| Rambus Inc | 41.76 | 7.33 | 14.06 | 3.84% | $0.08 | $0.14 | 22.68% |
| Skyworks Solutions Inc | 20.23 | 1.61 | 2.37 | 2.48% | $0.25 | $0.45 | 7.34% |
| Average | 82.54 | 7.69 | 10.89 | 3.68% | $39.41 | $33.89 | 31.66% |
Upon closer analysis of NVIDIA, the following trends become apparent:
With a Price to Earnings ratio of 51.67, which is 0.63x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
The elevated Price to Book ratio of 44.1 relative to the industry average by 5.73x suggests company might be overvalued based on its book value.
The Price to Sales ratio of 27.06, which is 2.48x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
The company has a higher Return on Equity (ROE) of 28.72%, which is 25.04% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $31.94 Billion is 0.81x below the industry average, suggesting potential lower profitability or financial challenges.
Compared to its industry, the company has lower gross profit of $33.85 Billion, which indicates 1.0x below the industry average, potentially indicating lower revenue after accounting for production costs.
The company's revenue growth of 55.6% exceeds the industry average of 31.66%, indicating strong sales performance and market outperformance.
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
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 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, 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 Semiconductors & Semiconductor Equipment.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: NVDA
