Today we're going to take a closer look at Large-Cap Technology company NVIDIA, whose shares are currently trading at $185.65. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
NVIDIA's P/B and P/E Ratios Are Higher Than Average:
NVIDIA Corporation, a computing infrastructure company, provides graphics and compute and networking solutions in the United States, Singapore, Taiwan, China, Hong Kong, and internationally. The company belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 30.44 and an average price to book (P/B) ratio of 4.19. In contrast, NVIDIA has a trailing 12 month P/E ratio of 52.9 and a P/B ratio of 45.14.
NVIDIA has moved 46.9% over the last year compared to 17.9% for the S&P 500 — a difference of 29.0%. NVIDIA has a 52 week high of $191.05 and a 52 week low of $86.62.
Wider Gross Margins Than the Industry Average of 42.19%:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $10,918 | $16,675 | $26,914 | $26,974 | $60,922 | $130,497 |
| Gross Margins | 62% | 62% | 65% | 56% | 73% | 75% |
| Net Margins | 26% | 26% | 36% | 16% | 49% | 56% |
| Net Income (M) | $2,796 | $4,332 | $9,752 | $4,368 | $29,760 | $72,880 |
| Net Interest Expense (M) | $52 | $184 | $236 | $262 | $257 | $246 |
| Depreciation & Amort. (M) | $381 | $1,098 | $1,174 | $1,544 | $1,508 | $1,300 |
| Diluted Shares (M) | 25,200 | 25,380 | 24,990 | 24,940 | 24,774 | 24,611 |
| Earnings Per Share | $0.11 | $0.17 | $0.39 | $0.18 | $1.2 | $2.96 |
| EPS Growth | n/a | 54.55% | 129.41% | -53.85% | 566.67% | 146.67% |
| Avg. Price | $43.41 | $98.64 | $194.93 | $216.93 | $495.22 | $185.74 |
| P/E Ratio | 394.64 | 580.24 | 499.82 | 1205.17 | 416.15 | 62.12 |
| Free Cash Flow (M) | $4,549 | $5,665 | $8,132 | $5,132 | $27,021 | $60,853 |
| CAPEX (M) | $212 | $157 | $976 | $509 | $1,069 | $3,236 |
| EV / EBITDA | 331.08 | 436.22 | 437.11 | 929.89 | 359.04 | 54.68 |
| Total Debt (M) | $7,959 | $10,944 | $12,199 | $10,955 | $8,462 | $8,464 |
| Net Debt / EBITDA | 1.77 | 1.72 | 0.84 | 0.94 | -0.02 | -0.08 |
| Current Ratio | 3.92 | 7.14 | 3.39 | 3.59 | 4.1 | 3.39 |
NVIDIA has rapidly growing revenues and increasing reinvestment in the business, exceptional EPS growth, and generally positive cash flows. The company also benefits from an excellent current ratio of 3.39, wider gross margins than its peer group, and healthy leverage levels.
