Comparative Study: NVIDIA And Industry Competitors In Semiconductors & Semiconductor Equipment Industry
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 (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. 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 | 57.02 | 51.41 | 29.44 | 23.01% | $22.58 | $26.67 | 69.18% |
| Broadcom Inc | 107.41 | 19.89 | 24.91 | 7.12% | $8.02 | $10.2 | 20.16% |
| Advanced Micro Devices Inc | 126.76 | 4.86 | 10.22 | 1.23% | $1.59 | $3.74 | 35.9% |
| Qualcomm Inc | 16.43 | 6.38 | 4.28 | 10.3% | $3.67 | $6.04 | 16.93% |
| ARM Holdings PLC | 219.16 | 25.46 | 43.61 | 3.17% | $0.46 | $1.21 | 33.73% |
| Texas Instruments Inc | 35.84 | 10.49 | 10.83 | 7.89% | $1.85 | $2.31 | 9.31% |
| Micron Technology Inc | 20.05 | 2.45 | 3.73 | 3.79% | $4.33 | $3.51 | 36.56% |
| Analog Devices Inc | 62.71 | 3.27 | 11.72 | 1.63% | $1.2 | $1.61 | 22.28% |
| Monolithic Power Systems Inc | 19.70 | 10.82 | 15.04 | 4.17% | $0.18 | $0.35 | 39.24% |
| ON Semiconductor Corp | 40.74 | 3.05 | 3.77 | -5.78% | $-0.37 | $0.29 | -22.39% |
| STMicroelectronics NV | 38.68 | 1.34 | 2.06 | -0.55% | $0.46 | $0.93 | -14.42% |
| ASE Technology Holding Co Ltd | 20.54 | 2.17 | 1.12 | 2.39% | $27.16 | $24.89 | 11.56% |
| First Solar Inc | 15.60 | 2.40 | 4.64 | 2.59% | $0.35 | $0.34 | 6.35% |
| Credo Technology Group Holding Ltd | 372.24 | 27.18 | 44.77 | 5.63% | $0.04 | $0.11 | 179.73% |
| United Microelectronics Corp | 11.36 | 1.36 | 2.22 | 2.06% | $23.86 | $15.45 | 5.91% |
| Skyworks Solutions Inc | 27.86 | 1.80 | 2.90 | 1.11% | $0.22 | $0.39 | -8.87% |
| Qorvo Inc | 145.38 | 2.31 | 2.16 | 0.93% | $0.11 | $0.37 | -7.6% |
| Lattice Semiconductor Corp | 145.22 | 10.44 | 15.19 | 0.71% | $0.02 | $0.08 | -14.68% |
| Universal Display Corp | 31.35 | 4.32 | 11.08 | 3.93% | $0.08 | $0.13 | 0.62% |
| Average | 80.95 | 7.78 | 11.9 | 2.91% | $4.07 | $4.0 | 19.46% |
Through a detailed examination of NVIDIA, we can deduce the following trends:
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The Price to Earnings ratio of 57.02 is 0.7x lower than the industry average, indicating potential undervaluation for the stock.
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The elevated Price to Book ratio of 51.41 relative to the industry average by 6.61x suggests company might be overvalued based on its book value.
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The stock's relatively high Price to Sales ratio of 29.44, surpassing the industry average by 2.47x, may indicate an aspect of overvaluation in terms of sales performance.
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The Return on Equity (ROE) of 23.01% is 20.1% above the industry average, highlighting efficient use of equity to generate profits.
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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $22.58 Billion, which is 5.55x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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The gross profit of $26.67 Billion is 6.67x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 69.18% exceeds the industry average of 19.46%, 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 comparing NVIDIA with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
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When considering the debt-to-equity ratio, NVIDIA exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.12, which can be perceived as a positive aspect by investors.
Key Takeaways
For NVIDIA in the Semiconductors & Semiconductor Equipment industry, the PE, PB, and PS ratios indicate that the stock is relatively undervalued compared to its peers. On the other hand, the high ROE, EBITDA, gross profit, and revenue growth suggest that NVIDIA is performing exceptionally well in terms of profitability and operational efficiency within the industry sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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