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NVIDIA Corporation
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=== Relative Valuation === The following table shows a comparison of NVIDIA to it's competitors in the computing hardware and semiconductor manufacturing industries. All ratios are calculated based on a 5 year annualised average. {| class="wikitable" |+Relative Valuation<ref name=":1" /> |'''Company''' |'''P/E''' |'''EPS''' |'''Dividend''' |'''Dividend Yield''' |'''Dividend Growth''' |'''ROE''' |'''ROA''' |'''ROI''' |- |'''Nvidia''' |x266.26 |$1.74 |$0.16 |0.18% |2.34% |18.86% |10.69% |12.47% |- |'''AMD''' |x137.89 |$0.84 |0 |0 |0 |0.72% |0.57% |0.63% |- |'''Intel''' |x18.27 |$1.94 |$1.46 |3.14% |6.26% | -0.91% | -0.53% | -0.63% |- |'''TSMC''' |x79.5 |$1.24 |$0.35 |71.11% |6.58% |33.97% |20.34% |24.73% |- |'''Qualcomm''' |x11.49 |$11.42 |$2.86 |2.64% |5.39% |64.36% |22.14% |29.78% |- |'''Broadcom''' |x34.23 |$26.53 |$16.4 |3.33% |32.08% |63.14% |19.09% |21.23% |- |'''Apple''' |x31.67 |$6.11 |$0.9 |0.89% |8.45% |145.61% |27.63% |43.34% |} [[File:PE Ratio Nvidia.png|center|thumb|693x693px]] The price to earning ratio for Nvidia is at x266, indicating that the stock is hugely overvalued. When compared to the industry average of x52, we can see that the stock is overpriced. [[File:EPS Nvidia.png|center|thumb|692x692px]] Earnings per share for Nvidia are $1.74, below the industry average of $7, this indicates that the company is not as profitable as some of it's peers. Taking into account both P/E and EPS gives us strong evidence that Nvidia stock is overvalued. [[File:Dividend Nvidia.png|center|thumb|682x682px]] The dividend paid out by Nvidia over the previous 5 years, as well as the dividend yield is significantly below all of it's competitors. The dividend growth also lacks behind it's industry peers. This indicates that the income prospects for this stock are not as good as some of it's competitors, who are also undervalued. Note AMD does not pay out a dividend. [[File:Returns Nvidia.png|center|thumb|684x684px]] The returns on Equity, Assets and Investment for Nvidia are lower than all of it's competitors, indicating that the company is not as efficient at generating profits as others in the same industry. The relative valuation indicates that Nvidia is overpriced, does not have brilliant income prospects, and is not as efficient at generating profits as some of it's industry competitors, such as Qualcomm, Broadcom and Apple. This could mean that in the future, share price for Nvidia is likely to fall or remain stagnant. However, investor sentiment and the volatility of the stock means that we may not see a translation of the value of the stock to the behaviour of it's share price.
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