Market Analysis: NVIDIA And Competitors In Semiconductors & Semiconductor Equipment Industry

In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating NVIDIA (NASDAQ: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 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 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	47.16	38.95	25.03	29.14%	$38.75	$41.85	62.49%
Broadcom Inc	73.82	20.54	26.75	11.02%	$9.86	$12.25	28.18%
Taiwan Semiconductor Manufacturing Co Ltd	31.49	9.90	13.63	9.44%	$691.11	$588.54	30.31%
Advanced Micro Devices Inc	112.56	5.76	10.96	2.06%	$2.11	$4.78	35.59%
Micron Technology Inc	27.07	5.45	7.60	9.28%	$8.35	$7.65	56.65%
Qualcomm Inc	34.89	8.83	4.36	-12.88%	$3.51	$6.24	10.03%
Intel Corp	603.33	1.62	2.98	3.98%	$7.85	$5.22	2.78%
Texas Instruments Inc	32.22	9.67	9.38	8.21%	$2.24	$2.72	14.24%
Analog Devices Inc	60.71	4.01	12.48	2.32%	$1.47	$1.94	25.91%
ARM Holdings PLC	141.37	15.80	26.64	3.3%	$0.22	$1.11	34.48%
Marvell Technology Inc	30.40	5.21	9.63	13.84%	$2.58	$1.07	36.83%
NXP Semiconductors NV	27.55	5.58	4.72	6.43%	$1.11	$1.79	-2.37%
Monolithic Power Systems Inc	24.28	12.71	17.12	5.12%	$0.21	$0.41	18.88%
ASE Technology Holding Co Ltd	31.97	3.41	1.74	3.56%	$32.4	$28.88	5.29%
First Solar Inc	20.70	3.21	5.74	5.19%	$0.61	$0.61	79.67%
Credo Technology Group Holding Ltd	124.85	20.34	34.75	7.99%	$0.09	$0.18	272.08%
STMicroelectronics NV	45.24	1.31	2.07	1.33%	$0.31	$1.06	-1.97%
ON Semiconductor Corp	75.25	2.80	3.71	3.22%	$0.44	$0.59	-11.98%
United Microelectronics Corp	14.96	1.76	2.65	4.29%	$30.07	$17.62	-2.25%
Tower Semiconductor Ltd	70.29	4.79	9.11	1.9%	$0.13	$0.09	6.79%
Lattice Semiconductor Corp	380.90	14.75	21.27	0.4%	$0.01	$0.09	4.92%
Rambus Inc	44.81	7.86	15.09	3.84%	$0.08	$0.14	22.68%
Average	95.65	7.87	11.54	4.47%	$37.85	$32.52	31.75%

After thoroughly examining NVIDIA, the following trends can be inferred:

• With a Price to Earnings ratio of 47.16, which is 0.49x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.

• The elevated Price to Book ratio of 38.95 relative to the industry average by 4.95x suggests company might be overvalued based on its book value.

• The Price to Sales ratio of 25.03, which is 2.17x 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 29.14% is 24.67% above the industry average, highlighting efficient use of equity to generate profits.

• The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.75 Billion is 1.02x above the industry average, highlighting stronger profitability and robust cash flow generation.

• Compared to its industry, the company has higher gross profit of $41.85 Billion, which indicates 1.29x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 62.49% is notably higher compared to the industry average of 31.75%, showcasing exceptional sales performance and strong demand for its products or services.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage 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 and its top 4 peers reveals the following information:

• In terms of the debt-to-equity ratio, NVIDIA has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.

• This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.09.

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 industry peers, reflecting strong financial performance and growth prospects.

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