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Understanding NVIDIA's Position In Semiconductors & Semiconductor Equipment Industry Compared To Competitors
NVIDIA Corporation +5.06%
NVIDIA Corporation NVDA | 122.55 | +5.06% |
In today's fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. In this article, we will conduct a comprehensive industry comparison, evaluating NVIDIA (NASDAQ:NVDA) against its key competitors in the Semiconductors & Semiconductor Equipment industry. By examining key financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.
NVIDIA Background
Nvidia Corp is an upfront developer of graphics processing unit and a full-stack computing infrastructure company with data-center-scale offerings that are reshaping industry. Traditionally, GPU were used to enhanvce experience,now Nvidia offers AI GPUs, and also a software platform, Cuda, used for AI model development and training. The company is also expanding its data center networking solutions, helping to tie GPUs together to handle complex workloads. such as AI, model training and inference, data analytics, scientific computing, and 3D graphics, with vertical-specific optimizations to address industries ranging from healthcare and telecom to automotive and manufacturing.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| NVIDIA Corp | 36.59 | 33.09 | 20.45 | 30.42% | $25.82 | $28.72 | 77.94% |
| Broadcom Inc | 79.77 | 11.61 | 15.23 | 8.01% | $8.54 | $10.14 | 24.71% |
| Taiwan Semiconductor Manufacturing Co Ltd | 22.12 | 6.05 | 8.97 | 9.05% | $596.09 | $512.38 | 38.84% |
| Qualcomm Inc | 14.50 | 5.53 | 3.73 | 11.97% | $4.23 | $6.51 | 17.45% |
| Advanced Micro Devices Inc | 88.70 | 2.50 | 5.63 | 0.84% | $1.69 | $3.88 | 24.16% |
| Texas Instruments Inc | 30.12 | 8.43 | 9.20 | 7.02% | $1.92 | $2.31 | -1.72% |
| ARM Holdings PLC | 132.18 | 16.50 | 28.85 | 4.05% | $0.22 | $0.95 | 19.3% |
| Analog Devices Inc | 56.98 | 2.52 | 9.53 | 1.11% | $1.03 | $1.43 | -3.56% |
| Micron Technology Inc | 16.76 | 1.61 | 2.52 | 3.32% | $3.95 | $2.96 | 38.27% |
| Monolithic Power Systems Inc | 13.25 | 7.38 | 10.72 | 52.73% | $0.17 | $0.34 | 36.93% |
| Microchip Technology Inc | 68.09 | 3.46 | 4.43 | -0.87% | $0.21 | $0.56 | -41.89% |
| ASE Technology Holding Co Ltd | 18.07 | 1.77 | 0.96 | 2.95% | $30.11 | $26.62 | 1.05% |
| STMicroelectronics NV | 11.40 | 0.97 | 1.34 | 1.95% | $0.89 | $1.25 | -22.42% |
| United Microelectronics Corp | 11.58 | 1.44 | 2.35 | 2.28% | $29.73 | $20.43 | -0.16% |
| ON Semiconductor Corp | 9.61 | 1.67 | 2.13 | 4.37% | $0.62 | $0.78 | -14.65% |
| First Solar Inc | 10.17 | 1.64 | 3.12 | 5.05% | $0.58 | $0.57 | 30.68% |
| Skyworks Solutions Inc | 16.56 | 1.29 | 2.15 | 2.54% | $0.31 | $0.44 | -11.07% |
| Credo Technology Group Holding Ltd | 1273 | 10.49 | 20.57 | 4.95% | $0.03 | $0.09 | 154.44% |
| Lattice Semiconductor Corp | 95.98 | 8.17 | 11.47 | 2.33% | $0.02 | $0.07 | -31.17% |
| Qorvo Inc | 196.89 | 1.52 | 1.40 | 1.22% | $0.14 | $0.39 | -14.67% |
| Universal Display Corp | 23.26 | 3.18 | 7.96 | 2.87% | $0.06 | $0.12 | 2.51% |
| Average | 109.45 | 4.89 | 7.61 | 6.39% | $34.03 | $29.61 | 12.35% |
Upon closer analysis of NVIDIA, the following trends become apparent:
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The stock's Price to Earnings ratio of 36.59 is lower than the industry average by 0.33x, suggesting potential value in the eyes of market participants.
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With a Price to Book ratio of 33.09, which is 6.77x 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 stock's relatively high Price to Sales ratio of 20.45, surpassing the industry average by 2.69x, may indicate an aspect of overvaluation in terms of sales performance.
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The Return on Equity (ROE) of 30.42% is 24.03% above the industry average, highlighting efficient use of equity to generate profits.
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The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $25.82 Billion, which is 0.76x below the industry average. This potentially indicates lower profitability or financial challenges.
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The gross profit of $28.72 Billion is 0.97x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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The company's revenue growth of 77.94% exceeds the industry average of 12.35%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.
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 assessing NVIDIA against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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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. A high ROE reflects efficient use of shareholder equity. The low EBITDA and gross profit may indicate room for improvement in operational efficiency. The high revenue growth rate signals strong performance in generating sales.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
