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Comparing NVIDIA With Industry Competitors In Semiconductors & Semiconductor Equipment Industry
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Comparing NVIDIA With Industry Competitors In Semiconductors & Semiconductor Equipment Industry
Dec 13, 2024 7:30 AM

In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating NVIDIA ( NVDA ) vis-à-vis its key competitors in the Semiconductors & Semiconductor Equipment industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight company's performance in the industry.

NVIDIA Background

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. 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
NVIDIA Corp ( NVDA ) 54.22 51.04 30.15 31.13% $22.86 $26.16 93.61%
Taiwan Semiconductor Manufacturing Co Ltd 30.73 8.09 12.18 8.36% $555.05 $439.35 38.95%
Broadcom Inc 140.05 12.47 16.74 -2.77% $6.39 $8.36 47.27%
Advanced Micro Devices Inc 115.58 3.72 8.79 1.36% $1.55 $3.42 17.57%
Qualcomm Inc 17.70 6.69 4.59 11.46% $3.21 $5.78 18.69%
Texas Instruments Inc 35.63 10.13 11.20 7.86% $2.09 $2.47 -8.41%
ARM Holdings PLC 244.68 25.87 44.48 1.83% $0.11 $0.81 4.71%
Micron Technology Inc 140.34 2.43 4.37 1.99% $3.63 $2.74 93.27%
Analog Devices Inc 66.38 3.07 11.52 1.36% $1.12 $1.42 -10.06%
Microchip Technology Inc 42.71 5.26 6.09 1.24% $0.34 $0.67 -48.37%
Monolithic Power Systems Inc 68.26 12.56 14.53 6.35% $0.17 $0.34 30.59%
ON Semiconductor Corp 16.65 3.33 3.96 4.75% $0.63 $0.8 -19.21%
STMicroelectronics NV 10.79 1.34 1.73 1.98% $0.74 $1.23 -26.63%
ASE Technology Holding Co Ltd 19.66 2.25 1.18 3.16% $28.59 $26.43 3.85%
First Solar Inc 16.91 2.77 5.48 4.22% $0.45 $0.45 10.81%
United Microelectronics Corp 10.13 1.42 2.27 4.0% $29.73 $20.43 5.99%
Skyworks Solutions Inc 24.29 2.26 3.47 0.95% $0.18 $0.43 -15.9%
MACOM Technology Solutions Holdings Inc 131.24 8.77 13.76 2.67% $0.05 $0.11 33.47%
Lattice Semiconductor Corp 61.24 12.25 15.38 1.03% $0.03 $0.09 -33.87%
Universal Display Corp 32.35 4.82 11.92 4.29% $0.08 $0.13 14.57%
Average 64.49 6.82 10.19 3.48% $33.38 $27.13 8.28%

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When conducting a detailed analysis of NVIDIA ( NVDA ), the following trends become clear:

At 54.22, the stock's Price to Earnings ratio is 0.84x less than the industry average, suggesting favorable growth potential.

The elevated Price to Book ratio of 51.04 relative to the industry average by 7.48x suggests company might be overvalued based on its book value.

The stock's relatively high Price to Sales ratio of 30.15, surpassing the industry average by 2.96x, may indicate an aspect of overvaluation in terms of sales performance.

With a Return on Equity (ROE) of 31.13% that is 27.65% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $22.86 Billion, which is 0.68x below the industry average, the company may face lower profitability or financial challenges.

With lower gross profit of $26.16 Billion, which indicates 0.96x below the industry average, the company may experience lower revenue after accounting for production costs.

The company's revenue growth of 93.61% exceeds the industry average of 8.28%, indicating strong sales performance and market outperformance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile 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 ( NVDA ) and its top 4 peers reveals the following information:

When comparing the debt-to-equity ratio, NVIDIA ( NVDA ) is in a stronger financial position compared to its top 4 peers.

The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.16.

Key Takeaways

For NVIDIA ( NVDA ), 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 reflects efficient use of shareholder equity, while low EBITDA and gross profit may indicate operational challenges. The high revenue growth rate signals strong sales performance relative to industry peers in the Semiconductors & Semiconductor Equipment sector.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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