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Comparative Study: NVIDIA And Industry Competitors In Semiconductors & Semiconductor Equipment Industry
NVIDIA Corporation +1.52%
NVIDIA Corporation NVDA | 145.00 | +1.52% |
In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing NVIDIA (NASDAQ:NVDA) alongside its primary competitors in the Semiconductors & Semiconductor Equipment industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to investors and shed light on company's performance within 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. 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 | 39.68 | 35.88 | 22.17 | 30.42% | $25.82 | $28.72 | 77.94% |
| Broadcom Inc | 96.39 | 14.03 | 18.41 | 8.01% | $8.54 | $10.14 | 24.71% |
| Advanced Micro Devices Inc | 75.07 | 2.88 | 6.05 | 1.23% | $1.59 | $3.74 | 35.9% |
| Qualcomm Inc | 14.81 | 5.75 | 3.86 | 10.3% | $3.67 | $6.04 | 16.93% |
| Texas Instruments Inc | 32.63 | 9.54 | 9.86 | 7.08% | $1.85 | $2.31 | 11.14% |
| ARM Holdings PLC | 154.40 | 17.85 | 30.72 | 3.17% | $0.22 | $0.95 | 26.25% |
| Analog Devices Inc | 66.30 | 2.93 | 11.08 | 1.11% | $1.03 | $1.43 | -3.56% |
| Micron Technology Inc | 20.54 | 1.97 | 3.09 | 3.32% | $3.95 | $2.96 | 38.27% |
| Monolithic Power Systems Inc | 17.01 | 9.35 | 12.99 | 4.17% | $0.18 | $0.35 | 39.24% |
| STMicroelectronics NV | 20.28 | 1.21 | 1.82 | 0.32% | $0.51 | $0.84 | -27.36% |
| ASE Technology Holding Co Ltd | 18.61 | 1.96 | 1.02 | 2.39% | $27.16 | $24.89 | 11.56% |
| United Microelectronics Corp | 12.15 | 1.46 | 2.38 | 2.06% | $23.86 | $15.45 | 5.91% |
| ON Semiconductor Corp | 28.46 | 2.13 | 2.64 | -5.78% | $-0.37 | $0.29 | -22.39% |
| First Solar Inc | 11.95 | 1.84 | 3.55 | 2.59% | $0.35 | $0.34 | 6.35% |
| Skyworks Solutions Inc | 26.64 | 1.76 | 2.78 | 1.11% | $0.22 | $0.39 | -8.87% |
| Credo Technology Group Holding Ltd | 1693.33 | 13.95 | 27.36 | 4.95% | $0.03 | $0.09 | 154.44% |
| Universal Display Corp | 29.92 | 4.12 | 10.57 | 3.93% | $0.08 | $0.13 | 0.62% |
| Qorvo Inc | 126.19 | 2.02 | 1.88 | 0.93% | $0.14 | $0.39 | -5.11% |
| Lattice Semiconductor Corp | 134.14 | 9.64 | 14.03 | 0.71% | $0.02 | $0.08 | -14.68% |
| Average | 143.27 | 5.8 | 9.12 | 2.87% | $4.06 | $3.93 | 16.07% |
Upon closer analysis of NVIDIA, the following trends become apparent:
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At 39.68, the stock's Price to Earnings ratio is 0.28x less than the industry average, suggesting favorable growth potential.
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With a Price to Book ratio of 35.88, which is 6.19x 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.
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The Price to Sales ratio of 22.17, which is 2.43x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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With a Return on Equity (ROE) of 30.42% that is 27.55% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $25.82 Billion, which is 6.36x above the industry average, indicating stronger profitability and robust cash flow generation.
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With higher gross profit of $28.72 Billion, which indicates 7.31x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 77.94% exceeds the industry average of 16.07%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
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.
In terms of the Debt-to-Equity ratio, NVIDIA stands in comparison with its top 4 peers, leading to the following comparisons:
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Among its top 4 peers, NVIDIA has a stronger financial position with a lower debt-to-equity ratio of 0.13.
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This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
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 its industry peers, reflecting strong financial health and growth prospects.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
