Amidst today’s fast-paced and highly competitive business environment, it is crucial for investors and industry enthusiasts to conduct comprehensive company evaluations. 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 | 51.61 | 44.05 | 27.03 | 28.72% | $31.94 | $33.85 | 55.6% |
| Broadcom Inc | 87.86 | 22.08 | 27.66 | 5.8% | $8.29 | $10.7 | 22.03% |
| Advanced Micro Devices Inc | 142.53 | 6.47 | 13.12 | 1.48% | $0.72 | $3.06 | 31.71% |
| Micron Technology Inc | 26.65 | 4.19 | 6.09 | 6.1% | $5.9 | $5.05 | 46.0% |
| Qualcomm Inc | 16.30 | 6.70 | 4.36 | 9.71% | $3.52 | $5.76 | 10.35% |
| ARM Holdings PLC | 256.64 | 25.61 | 43.74 | 1.88% | $0.17 | $1.02 | 12.14% |
| Texas Instruments Inc | 33.06 | 10.02 | 9.94 | 7.85% | $2.09 | $2.58 | 16.38% |
| Analog Devices Inc | 62.69 | 3.56 | 11.81 | 1.5% | $1.33 | $1.79 | 24.57% |
| NXP Semiconductors NV | 26.50 | 5.86 | 4.69 | 4.71% | $0.92 | $1.56 | -6.43% |
| Monolithic Power Systems Inc | 26.91 | 14.48 | 19.56 | 4.01% | $0.18 | $0.37 | 30.97% |
| ASE Technology Holding Co Ltd | 25.84 | 2.88 | 1.38 | 2.49% | $26.99 | $25.69 | 7.5% |
| STMicroelectronics NV | 44.26 | 1.53 | 2.36 | -0.55% | $0.8 | $0.93 | -14.42% |
| Credo Technology Group Holding Ltd | 200.24 | 31.92 | 44.69 | 8.67% | $0.07 | $0.15 | 273.57% |
| First Solar Inc | 19.39 | 2.85 | 5.61 | 4.09% | $0.49 | $0.5 | 8.58% |
| ON Semiconductor Corp | 52.46 | 2.84 | 3.65 | 2.13% | $0.38 | $0.55 | -15.36% |
| United Microelectronics Corp | 13.67 | 1.70 | 2.38 | 2.45% | $24.98 | $16.88 | 3.45% |
| Skyworks Solutions Inc | 30.44 | 2.01 | 3.01 | 1.81% | $0.23 | $0.4 | 6.57% |
| Rambus Inc | 46.21 | 8.54 | 16.40 | 4.85% | $0.08 | $0.14 | 30.33% |
| Average | 65.39 | 9.01 | 12.97 | 4.06% | $4.54 | $4.54 | 28.7% |
When closely examining NVIDIA, the following trends emerge:
-
With a Price to Earnings ratio of 51.61, which is 0.79x 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 44.05 relative to the industry average by 4.89x suggests company might be overvalued based on its book value.
-
The Price to Sales ratio of 27.03, which is 2.08x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
-
With a Return on Equity (ROE) of 28.72% that is 24.66% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
-
The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $31.94 Billion, which is 7.04x above the industry average, indicating stronger profitability and robust cash flow generation.
-
Compared to its industry, the company has higher gross profit of $33.85 Billion, which indicates 7.46x above the industry average, indicating stronger profitability and higher earnings from its core operations.
-
The company’s revenue growth of 55.6% is notably higher compared to the industry average of 28.7%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
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 assessing NVIDIA against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
-
Among its top 4 peers, NVIDIA 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.
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. The high ROE, EBITDA, gross profit, and revenue growth highlight robust financial performance and growth prospects within the industry.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
Market News and Data brought to you by Benzinga APIs
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.