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In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating NVIDIA (NASDAQ:NVDA) in relation to its major competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and highlight 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 | 52.03 | 44.41 | 27.25 | 28.72% | $31.94 | $33.85 | 55.6% |
| Broadcom Inc | 89.55 | 22.51 | 28.19 | 5.8% | $8.29 | $10.7 | 22.03% |
| Advanced Micro Devices Inc | 144.05 | 6.54 | 13.26 | 1.48% | $0.72 | $3.06 | 31.71% |
| Micron Technology Inc | 27.24 | 4.28 | 6.22 | 6.1% | $5.9 | $5.05 | 46.0% |
| ARM Holdings PLC | 259.85 | 25.93 | 44.29 | 1.88% | $0.17 | $1.02 | 12.14% |
| Qualcomm Inc | 16.12 | 6.62 | 4.31 | 9.71% | $3.52 | $5.76 | 10.35% |
| Texas Instruments Inc | 32.83 | 9.95 | 9.88 | 7.85% | $2.09 | $2.58 | 16.38% |
| Analog Devices Inc | 62.65 | 3.55 | 11.81 | 1.5% | $1.33 | $1.79 | 24.57% |
| NXP Semiconductors NV | 26.20 | 5.79 | 4.63 | 4.71% | $0.92 | $1.56 | -6.43% |
| Monolithic Power Systems Inc | 26.99 | 14.52 | 19.62 | 4.01% | $0.18 | $0.37 | 30.97% |
| ASE Technology Holding Co Ltd | 26.47 | 2.95 | 1.41 | 2.49% | $26.99 | $25.69 | 7.5% |
| STMicroelectronics NV | 43.78 | 1.52 | 2.33 | -0.55% | $0.8 | $0.93 | -14.42% |
| Credo Technology Group Holding Ltd | 210.64 | 33.58 | 47.01 | 8.67% | $0.07 | $0.15 | 273.57% |
| First Solar Inc | 19.57 | 2.87 | 5.67 | 4.09% | $0.49 | $0.5 | 8.58% |
| ON Semiconductor Corp | 52.28 | 2.83 | 3.64 | 2.13% | $0.38 | $0.55 | -15.36% |
| United Microelectronics Corp | 13.80 | 1.72 | 2.40 | 2.45% | $24.98 | $16.88 | 3.45% |
| Skyworks Solutions Inc | 30.33 | 2 | 3 | 1.81% | $0.23 | $0.4 | 6.57% |
| Rambus Inc | 46.34 | 8.57 | 16.44 | 4.85% | $0.08 | $0.14 | 30.33% |
| Average | 66.39 | 9.16 | 13.18 | 4.06% | $4.54 | $4.54 | 28.7% |
By carefully studying NVIDIA, we can deduce the following trends:
The stock's Price to Earnings ratio of 52.03 is lower than the industry average by 0.78x, suggesting potential value in the eyes of market participants.
The elevated Price to Book ratio of 44.41 relative to the industry average by 4.85x suggests company might be overvalued based on its book value.
With a relatively high Price to Sales ratio of 27.25, which is 2.07x 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 24.66% 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 7.04x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
With higher gross profit of $33.85 Billion, which indicates 7.46x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
With a revenue growth of 55.6%, which surpasses the industry average of 28.7%, 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 light of the Debt-to-Equity ratio, a comparison between NVIDIA and its top 4 peers reveals the following information:
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. The high ROE, EBITDA, gross profit, and revenue growth highlight strong profitability and growth potential within the industry sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: NVDA
