Company Report: Nvidia Corp. (NVDA)

Valuation:

NVIDIA has significantly higher valuation multiples compared to the industry, sector, and S&P 500 averages, indicating that investors are willing to pay a premium for the company's stock.

The Price/Earnings (TTM) ratio of 75.72 is much higher than the industry average of 58.07, sector average of 41.92, and S&P 500 average of 36.95.

Similarly, NVIDIA's Price/Cash Flow, Price/Sales (TTM), and Price/Book ratios are all substantially higher than the respective averages.

Per Share Data:

NVIDIA's dividend per share of $0.16 is lower than the industry, sector, and S&P 500 averages.

The company's book value per share of $17.44 is also lower than the averages.

However, NVIDIA's EPS (TTM) of $11.93 and revenue per share of $24.43 are higher than the respective averages.

Profitability:

NVIDIA demonstrates strong profitability, with EBITDA, operating margin, profit margin, and gross profit margin all significantly higher than the industry, sector, and S&P 500 averages.

Dividend:

NVIDIA's dividend yield of 0.03% is much lower than the industry, sector, and S&P 500 averages.

The company's payout ratio of 1.33 is also substantially lower than the averages.

Growth:

NVIDIA has consistently delivered strong growth in net income, earnings per share, and revenue compared to the industry, sector, and S&P 500 averages.

The company's PEG ratio (MRFY) of 1.52 is higher than the averages, indicating that its stock may be relatively overvalued considering its growth prospects.

Financial Strength:

NVIDIA has a strong liquidity position, with a quick ratio of 3.38 and a current ratio of 4.17, both higher than the industry and sector averages.

The company's LT debt to equity and total debt to capital ratios are lower than the averages, indicating a relatively lower level of financial leverage.

NVIDIA's return on equity, return on assets, and return on invested capital are all significantly higher than the respective averages, suggesting strong profitability and efficiency in utilizing its resources.

Assets:

NVIDIA's asset turnover of 1.02 is higher than the industry, sector, and S&P 500 averages, indicating efficient use of assets to generate revenue.

The company's assets per employee of $2.0M are in line with the industry average but lower than the S&P 500 average.

NVIDIA's inventory turnover of 2.78 is slightly higher than the industry average but lower than the sector and S&P 500 averages.

Overall, NVIDIA's financial performance and position appear to be strong, with high valuation multiples, strong profitability, and consistent growth. However, the company's dividend yield and payout ratio are relatively low compared to the averages.

Bottom Line:
NVIDIA's financial performance and position are strong, with high valuation multiples, strong profitability, and consistent growth. However, the company's dividend yield and payout ratio are relatively low compared to the averages.

Relative Valuation:
NVIDIA's valuation multiples are significantly higher than the industry, sector, and S&P 500 averages. The company's Price/Earnings (TTM) ratio is 104% higher than the industry average, 81% higher than the sector average, and 105% higher than the S&P 500 average. This suggests that investors are willing to pay a substantial premium for NVIDIA's stock compared to its peers and the broader market.

S&P 500 Valuation:
As of April 1, 2024, the S&P 500's P/E ratio stands at 36.95, which is higher than its historical average. Prior to the 2008-2009 financial crisis, the S&P 500's P/E ratio peaked at around 27 in 2007. During the crisis, the P/E ratio bottomed out at approximately 11 in 2009.

If the market were to experience a similar crash today and the S&P 500's P/E ratio were to adjust to the same level as during the 2008-2009 crisis (around 11), it would represent a 70% decline from the current P/E ratio of 36.95.

NVIDIA's Stock Price in a Market Crash Scenario:
Given NVIDIA's beta of 1.37, if the S&P 500 were to experience a decline similar to the 2008-2009 crash and adjust to a P/E ratio of 11, NVIDIA's stock price would likely experience a more pronounced decline due to its higher sensitivity to market movements.

Assuming a 70% decline in the S&P 500, NVIDIA's stock price could potentially decrease by approximately 96% (70% × 1.37) from its current level of $899.97. This would result in a projected stock price of around $35.99 for NVIDIA in this hypothetical scenario.

It is important to note that this is a speculative scenario based on historical data and assumes that market conditions and investor sentiment would be similar to those experienced during the 2008-2009 financial crisis. Actual market movements and stock price adjustments may vary depending on a wide range of factors and circumstances.