Decent Value Stocks. Analyze the stocks with a good fundamental valuation, while still showing decent profitability, health and growth.


NVIDIA CORP

Nasdaq / Information Technology / Semiconductors & Semiconductor Equipment

Fundamental Rating

9

We assign a fundamental rating of 9 out of 10 to NVDA. NVDA was compared to 108 industry peers in the Semiconductors & Semiconductor Equipment industry. NVDA gets an excellent profitability rating and is at the same time showing great financial health properties. NVDA has both an excellent growth and valuation score. This means it is growing and it is still cheap. This is a rare combination! These ratings could make NVDA a good candidate for value and growth and quality investing.



10

1. Profitability

1.1 Basic Checks

In the past year NVDA was profitable.
In the past year NVDA had a positive cash flow from operations.
NVDA had positive earnings in each of the past 5 years.
Each year in the past 5 years NVDA had a positive operating cash flow.

1.2 Ratios

With an excellent Return On Assets value of 55.27%, NVDA belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
NVDA has a better Return On Equity (86.68%) than 100.00% of its industry peers.
NVDA's Return On Invested Capital of 68.12% is amongst the best of the industry. NVDA outperforms 100.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NVDA is significantly above the industry average of 10.85%.
The last Return On Invested Capital (68.12%) for NVDA is above the 3 year average (31.07%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 55.27%
ROE 86.68%
ROIC 68.12%
ROA(3y)25.98%
ROA(5y)21.83%
ROE(3y)41.88%
ROE(5y)34.84%
ROIC(3y)31.07%
ROIC(5y)25.18%

1.3 Margins

Looking at the Profit Margin, with a value of 53.40%, NVDA belongs to the top of the industry, outperforming 98.15% of the companies in the same industry.
NVDA's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 60.02%, NVDA belongs to the best of the industry, outperforming 99.07% of the companies in the same industry.
NVDA's Operating Margin has improved in the last couple of years.
The Gross Margin of NVDA (75.29%) is better than 94.44% of its industry peers.
In the last couple of years the Gross Margin of NVDA has grown nicely.
Industry RankSector Rank
OM 60.02%
PM (TTM) 53.4%
GM 75.29%
OM growth 3Y25.23%
OM growth 5Y11.18%
PM growth 3Y23.43%
PM growth 5Y6.69%
GM growth 3Y5.34%
GM growth 5Y3.8%

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8

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so NVDA is creating value.
Compared to 1 year ago, NVDA has about the same amount of shares outstanding.
NVDA has more shares outstanding than it did 5 years ago.
NVDA has a better debt/assets ratio than last year.

2.2 Solvency

NVDA has an Altman-Z score of 10.74. This indicates that NVDA is financially healthy and has little risk of bankruptcy at the moment.
NVDA has a Altman-Z score of 10.74. This is in the better half of the industry: NVDA outperforms 78.70% of its industry peers.
NVDA has a debt to FCF ratio of 0.25. This is a very positive value and a sign of high solvency as it would only need 0.25 years to pay back of all of its debts.
NVDA has a Debt to FCF ratio of 0.25. This is amongst the best in the industry. NVDA outperforms 82.41% of its industry peers.
A Debt/Equity ratio of 0.17 indicates that NVDA is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.17, NVDA perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.17
Debt/FCF 0.25
Altman-Z 10.74
ROIC/WACC5.45
WACC12.5%

2.3 Liquidity

NVDA has a Current Ratio of 3.53. This indicates that NVDA is financially healthy and has no problem in meeting its short term obligations.
NVDA has a Current ratio (3.53) which is in line with its industry peers.
A Quick Ratio of 3.14 indicates that NVDA has no problem at all paying its short term obligations.
With a decent Quick ratio value of 3.14, NVDA is doing good in the industry, outperforming 62.96% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 3.53
Quick Ratio 3.14

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9

3. Growth

3.1 Past

NVDA shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 488.24%, which is quite impressive.
The Earnings Per Share has been growing by 50.90% on average over the past years. This is a very strong growth
NVDA shows a strong growth in Revenue. In the last year, the Revenue has grown by 208.27%.
NVDA shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 39.06% yearly.
EPS 1Y (TTM)488.24%
EPS 3Y73.17%
EPS 5Y50.9%
EPS Q2Q%461.47%
Revenue 1Y (TTM)208.27%
Revenue growth 3Y54.02%
Revenue growth 5Y39.06%
Sales Q2Q%262.12%

3.2 Future

Based on estimates for the next years, NVDA will show a very strong growth in Earnings Per Share. The EPS will grow by 28.56% on average per year.
NVDA is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 27.79% yearly.
EPS Next Y97.79%
EPS Next 2Y59.8%
EPS Next 3Y43.29%
EPS Next 5Y28.56%
Revenue Next Year89.93%
Revenue Next 2Y55.9%
Revenue Next 3Y41.12%
Revenue Next 5Y27.79%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

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10

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 6.72, the valuation of NVDA can be described as very cheap.
97.22% of the companies in the same industry are more expensive than NVDA, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.24, NVDA is valued rather cheaply.
NVDA is valuated cheaply with a Price/Forward Earnings ratio of 3.65.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NVDA indicates a rather cheap valuation: NVDA is cheaper than 98.15% of the companies listed in the same industry.
NVDA's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 19.93.
Industry RankSector Rank
PE 6.72
Fwd PE 3.65

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, NVDA is valued cheaply inside the industry as 97.22% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, NVDA is valued cheaply inside the industry as 98.15% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 7.56
EV/EBITDA 4.61

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
NVDA has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as NVDA's earnings are expected to grow with 43.29% in the coming years.
PEG (NY)0.07
PEG (5Y)0.13
EPS Next 2Y59.8%
EPS Next 3Y43.29%

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6

5. Dividend

5.1 Amount

NVDA has a yearly dividend return of 0.03%, which is pretty low.
NVDA's Dividend Yield is a higher than the industry average which is at 1.79.
Compared to an average S&P500 Dividend Yield of 2.37, NVDA's dividend is way lower than the S&P500 average.
Industry RankSector Rank
Dividend Yield 0.03%

5.2 History

The dividend of NVDA has a limited annual growth rate of 0.91%.
NVDA has paid a dividend for at least 10 years, which is a reliable track record.
NVDA has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)0.91%
Div Incr Years0
Div Non Decr Years11

5.3 Sustainability

0.92% of the earnings are spent on dividend by NVDA. This is a low number and sustainable payout ratio.
The dividend of NVDA is growing, but earnings are growing more, so the dividend growth is sustainable.
DP0.92%
EPS Next 2Y59.8%
EPS Next 3Y43.29%

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