In the ever-changing and fiercely competitive business landscape, conducting thorough company analysis is crucial for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating NVIDIA ( NVDA ) and its primary competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for investors and shed light on company's performance within the industry.
Nvidia ( NVDA ) 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 ( NVDA ) not only offers AI GPUs, but also a software platform, Cuda, used for AI model development and training. Nvidia ( NVDA ) 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 |
|---|---|---|---|---|---|---|---|
| 44.71 | 36.93 | 23.73 | 28.72% | 55.6% | |||
| Broadcom Inc | 88.93 | 22.35 | 28 | 5.8% | 22.03% | ||
| Taiwan Semiconductor Manufacturing Co Ltd | 28.50 | 8.96 | 12.34 | 9.44% | 30.31% | ||
| Advanced Micro Devices Inc | 107.86 | 5.52 | 10.50 | 2.06% | 35.59% | ||
| Micron Technology Inc | 26.53 | 4.17 | 6.06 | 6.1% | 46.0% | ||
| Qualcomm Inc | 31.85 | 8.06 | 3.98 | -12.88% | 10.03% | ||
| Intel Corp | 560.33 | 1.51 | 2.77 | 3.98% | 2.78% | ||
| ARM Holdings PLC | 169.91 | 18.98 | 32.02 | 3.3% | 34.48% | ||
| Texas Instruments Inc | 27.93 | 8.38 | 8.13 | 8.21% | 14.24% | ||
| Analog Devices Inc | 57.30 | 3.25 | 10.80 | 1.5% | 24.57% | ||
| NXP Semiconductors NV | 22.77 | 4.61 | 3.90 | 6.43% | -2.37% | ||
| Monolithic Power Systems Inc | 21.99 | 11.51 | 15.51 | 5.12% | 18.88% | ||
| ASE Technology Holding Co Ltd | 27.62 | 2.95 | 1.50 | 3.56% | 5.29% | ||
| First Solar Inc | 18.87 | 2.93 | 5.23 | 5.19% | 79.67% | ||
| Credo Technology Group Holding Ltd | 187.12 | 29.83 | 41.76 | 8.67% | 273.57% | ||
| STMicroelectronics NV | 36.55 | 1.06 | 1.67 | 1.33% | -1.97% | ||
| ON Semiconductor Corp | 61.51 | 2.29 | 3.03 | 3.22% | 5.6% | ||
| United Microelectronics Corp | 13.12 | 1.54 | 2.32 | 4.29% | -2.25% | ||
| Tower Semiconductor Ltd | 52.92 | 3.61 | 6.86 | 1.9% | 6.79% | ||
| Rambus Inc | 41.57 | 7.29 | 14 | 3.84% | 22.68% | ||
| Skyworks Solutions Inc | 19.64 | 1.56 | 2.30 | 2.48% | 7.34% | ||
| Average | 80.14 | 7.52 | 10.63 | 3.68% | 31.66% |
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By closely studying NVIDIA ( NVDA ), we can observe the following trends:
At 44.71, the stock's Price to Earnings ratio is 0.56x less than the industry average, suggesting favorable growth potential.
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 36.93 which exceeds the industry average by 4.91x.
The Price to Sales ratio of 23.73, which is 2.23x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
The Return on Equity (ROE) of 28.72% is 25.04% above the industry average, highlighting efficient use of equity to generate profits.
The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $31.94 Billion, which is 0.81x below the industry average. This potentially indicates lower profitability or financial challenges.
With lower gross profit of $33.85 Billion, which indicates 1.0x below the industry average, the company may experience lower revenue after accounting for production costs.
The company's revenue growth of 55.6% is notably higher compared to the industry average of 31.66%, showcasing exceptional sales performance and strong demand for its products or services.
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 light of the Debt-to-Equity ratio, a comparison between NVIDIA ( NVDA ) and its top 4 peers reveals the following information:
Among its top 4 peers, NVIDIA ( NVDA ) has a stronger financial position with a lower debt-to-equity ratio of 0.11.
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.
The low P/E ratio suggests that NVIDIA ( NVDA ) may be undervalued compared to its peers in the Semiconductors & Semiconductor Equipment industry. However, the high P/B and P/S ratios indicate that the market values the company's assets and sales more highly. On the other hand, the high ROE and revenue growth, along with low EBITDA and gross profit, may indicate that NVIDIA ( NVDA ) is efficiently utilizing its resources and experiencing strong growth potential relative to industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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