NVIDIA CORP (NASDAQ:NVDA) – A Strong Contender for Quality Investors
By Mill Chart
Last update: May 28, 2025
NVIDIA CORP (NASDAQ:NVDA) stands out as a compelling candidate for quality investors, meeting stringent criteria based on growth, profitability, and financial health. The company’s strong fundamentals and leadership in accelerated computing make it a noteworthy pick for long-term investors.
Why NVIDIA Fits the Quality Investing Profile
- Revenue and EBIT Growth: NVIDIA has delivered impressive revenue growth, with a 5-year CAGR of 19.1%. EBIT growth over the same period is even stronger at 95.9%, indicating improving operational efficiency.
- High ROIC: The company’s return on invested capital (excluding cash and goodwill) is an exceptional 161.6%, demonstrating effective capital allocation.
- Strong Profit Quality: NVIDIA converts 90.6% of net income into free cash flow on average over the past five years, reflecting high earnings quality.
- Low Debt Burden: With a debt-to-free cash flow ratio of just 0.14, NVIDIA could pay off all its debt in less than two months using current cash flows.
Fundamental Analysis Highlights
NVIDIA’s financial health is robust, with high marks across key metrics:
- Profitability: Operating margins of 62.9% and net margins of 55.9% are among the best in the semiconductor industry.
- Growth: Past revenue and earnings growth have been stellar, and analysts expect continued expansion, albeit at a slightly moderated pace.
- Valuation: While the stock trades at a premium (P/E of 45.3), its growth prospects and profitability may justify the valuation.
Our Caviar Cruise screener identifies more stocks that fit this quality-focused strategy. For a deeper dive into NVIDIA’s fundamentals, review the full analysis here.
Disclaimer
This is not investing advice. Always conduct your own research before making investment decisions.
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13 hours ago - ChartmillNVIDIA CORP (NASDAQ:NVDA) – A Strong Contender for Quality InvestorsNVIDIA (NVDA) meets quality investing criteria with strong growth, high profitability, and a solid balance sheet, making it a top pick for long-term investors.
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