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华尔街日报Evaluating NVIDIA Against Peers In Semiconductors & Semiconductor Equipment Industry
Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating NVIDIA (NASDAQ:NVDA) in comparison to its major competitors within the Semiconductors & Semiconductor Equipment industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in 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 | 46.42 | 38.34 | 24.64 | 29.14% | $38.75 | $41.85 | 62.49% |
| Broadcom Inc | 73.34 | 20.40 | 26.58 | 11.02% | $9.86 | $12.25 | 28.18% |
| Taiwan Semiconductor Manufacturing Co Ltd | 31.04 | 9.76 | 13.44 | 9.44% | $691.11 | $588.54 | 30.31% |
| Advanced Micro Devices Inc | 112.74 | 5.77 | 10.98 | 2.06% | $2.11 | $4.78 | 35.59% |
| Micron Technology Inc | 27.82 | 5.60 | 7.81 | 9.28% | $8.35 | $7.65 | 56.65% |
| Qualcomm Inc | 34.66 | 8.77 | 4.33 | -12.88% | $3.51 | $6.24 | 10.03% |
| Intel Corp | 621.67 | 1.67 | 3.07 | 3.98% | $7.85 | $5.22 | 2.78% |
| Texas Instruments Inc | 31.95 | 9.59 | 9.30 | 8.21% | $2.24 | $2.72 | 14.24% |
| Analog Devices Inc | 60.27 | 3.98 | 12.39 | 2.32% | $1.47 | $1.94 | 25.91% |
| ARM Holdings PLC | 142.13 | 15.88 | 26.79 | 3.3% | $0.22 | $1.11 | 34.48% |
| Marvell Technology Inc | 30.55 | 5.23 | 9.67 | 13.84% | $2.58 | $1.07 | 36.83% |
| NXP Semiconductors NV | 27.19 | 5.51 | 4.65 | 6.43% | $1.11 | $1.79 | -2.37% |
| Monolithic Power Systems Inc | 23.70 | 12.41 | 16.72 | 5.12% | $0.21 | $0.41 | 18.88% |
| ASE Technology Holding Co Ltd | 32.48 | 3.46 | 1.76 | 3.56% | $32.4 | $28.88 | 5.29% |
| First Solar Inc | 20.28 | 3.15 | 5.63 | 5.19% | $0.61 | $0.61 | 79.67% |
| Credo Technology Group Holding Ltd | 124.93 | 20.35 | 34.77 | 7.99% | $0.09 | $0.18 | 272.08% |
| STMicroelectronics NV | 44.93 | 1.30 | 2.06 | 1.33% | $0.31 | $1.06 | -1.97% |
| ON Semiconductor Corp | 74.30 | 2.76 | 3.66 | 3.22% | $0.44 | $0.59 | -11.98% |
| United Microelectronics Corp | 14.79 | 1.74 | 2.62 | 4.29% | $30.07 | $17.62 | -2.25% |
| Tower Semiconductor Ltd | 69.75 | 4.75 | 9.03 | 1.9% | $0.13 | $0.09 | 6.79% |
| Lattice Semiconductor Corp | 372.90 | 14.44 | 20.82 | 0.4% | $0.01 | $0.09 | 4.92% |
| Rambus Inc | 45.09 | 7.91 | 15.18 | 3.84% | $0.08 | $0.14 | 22.68% |
| Average | 96.02 | 7.83 | 11.49 | 4.47% | $37.85 | $32.52 | 31.75% |
When conducting a detailed analysis of NVIDIA, the following trends become clear:
At 46.42, the stock's Price to Earnings ratio is 0.48x less than the industry average, suggesting favorable growth potential.
The elevated Price to Book ratio of 38.34 relative to the industry average by 4.9x suggests company might be overvalued based on its book value.
The Price to Sales ratio of 24.64, which is 2.14x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
The company has a higher Return on Equity (ROE) of 29.14%, which is 24.67% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.75 Billion, which is 1.02x above the industry average, indicating 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 is experiencing remarkable revenue growth, with a rate of 62.49%, outperforming the industry average of 31.75%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared 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 comparing NVIDIA with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
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. A high ROE reflects efficient use of shareholder equity, while high EBITDA and gross profit signify robust operational performance. The high revenue growth indicates strong top-line expansion potential. In the Semiconductors & Semiconductor Equipment industry, NVIDIA appears attractively valued based on these metrics.
This article was generated by Benzinga's automated content engine and reviewed by an editor.