In the fast-paced 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) in comparison to its major competitors within the Semiconductors & Semiconductor Equipment industry. By analyzing crucial 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 Background
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 | 45.47 | 37.55 | 24.13 | 29.14% | $38.75 | $41.85 | 62.49% |
| Broadcom Inc | 71.58 | 19.91 | 25.94 | 11.02% | $9.86 | $12.25 | 28.18% |
| Taiwan Semiconductor Manufacturing Co Ltd | 30.52 | 9.60 | 13.21 | 9.44% | $691.11 | $588.54 | 30.31% |
| Advanced Micro Devices Inc | 112.54 | 5.76 | 10.96 | 2.06% | $2.11 | $4.78 | 35.59% |
| Micron Technology Inc | 26.29 | 5.29 | 7.38 | 9.28% | $8.35 | $7.65 | 56.65% |
| Qualcomm Inc | 34.77 | 8.80 | 4.35 | -12.88% | $3.51 | $6.24 | 10.03% |
| Intel Corp | 606.17 | 1.63 | 3 | 3.98% | $7.85 | $5.22 | 2.78% |
| Texas Instruments Inc | 32.57 | 9.77 | 9.48 | 8.21% | $2.24 | $2.72 | 14.24% |
| Analog Devices Inc | 60.49 | 3.99 | 12.43 | 2.32% | $1.47 | $1.94 | 25.91% |
| ARM Holdings PLC | 145.24 | 16.23 | 27.37 | 3.3% | $0.22 | $1.11 | 34.48% |
| Marvell Technology Inc | 29.86 | 5.12 | 9.45 | 13.84% | $2.58 | $1.07 | 36.83% |
| NXP Semiconductors NV | 28.30 | 5.74 | 4.84 | 6.43% | $1.11 | $1.79 | -2.37% |
| Monolithic Power Systems Inc | 24.25 | 12.69 | 17.10 | 5.12% | $0.21 | $0.41 | 18.88% |
| ASE Technology Holding Co Ltd | 31.23 | 3.33 | 1.70 | 3.56% | $32.4 | $28.88 | 5.29% |
| First Solar Inc | 21.84 | 3.39 | 6.06 | 5.19% | $0.61 | $0.61 | 79.67% |
| Credo Technology Group Holding Ltd | 129.26 | 21.06 | 35.97 | 7.99% | $0.09 | $0.18 | 272.08% |
| ON Semiconductor Corp | 77.22 | 2.87 | 3.81 | 3.22% | $0.44 | $0.59 | -11.98% |
| STMicroelectronics NV | 44.72 | 1.29 | 2.05 | 1.33% | $0.31 | $1.06 | -1.97% |
| United Microelectronics Corp | 15.17 | 1.79 | 2.69 | 4.29% | $30.07 | $17.62 | -2.25% |
| Tower Semiconductor Ltd | 68.41 | 4.66 | 8.86 | 1.9% | $0.13 | $0.09 | 6.79% |
| Lattice Semiconductor Corp | 382.55 | 14.82 | 21.36 | 0.4% | $0.01 | $0.09 | 4.92% |
| Rambus Inc | 45.36 | 7.96 | 15.27 | 3.84% | $0.08 | $0.14 | 22.68% |
| Average | 96.11 | 7.89 | 11.58 | 4.47% | $37.85 | $32.52 | 31.75% |
By thoroughly analyzing NVIDIA, we can discern the following trends:
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At 45.47, the stock's Price to Earnings ratio is 0.47x less than the industry average, suggesting favorable growth potential.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 37.55 which exceeds the industry average by 4.76x.
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The Price to Sales ratio of 24.13, which is 2.08x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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The Return on Equity (ROE) of 29.14% is 24.67% above the industry average, highlighting efficient use of equity to generate profits.
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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.75 Billion, which is 1.02x above the industry average, implying stronger profitability and robust cash flow generation.
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The company has higher gross profit of $41.85 Billion, which indicates 1.29x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 62.49% exceeds the industry average of 31.75%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
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.
In light of the Debt-to-Equity ratio, a comparison between NVIDIA and its top 4 peers reveals the following information:
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When considering the debt-to-equity ratio, NVIDIA exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.09, which can be perceived as a positive aspect by investors.
Key Takeaways
For NVIDIA in the Semiconductors & Semiconductor Equipment industry, the PE, PB, and PS ratios indicate that the stock is relatively undervalued compared to its peers. On the other hand, the high ROE, EBITDA, gross profit, and revenue growth suggest that NVIDIA is performing exceptionally well in terms of profitability and operational efficiency within the industry sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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