Don't overlook NASDAQ:NVDA—a stock with solid growth prospects and a reasonable valuation.

Last update: Sep 3, 2024

Our stock screening tool has pinpointed NVIDIA CORP (NASDAQ:NVDA) as a growth stock that isn't overvalued. NASDAQ:NVDA is excelling in various growth indicators while maintaining a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

A Closer Look at Growth for NASDAQ:NVDA

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:NVDA has achieved a 9 out of 10:

The Earnings Per Share has grown by an impressive 320.95% over the past year.
The Earnings Per Share has been growing by 50.90% on average over the past years. This is a very strong growth
The Revenue has grown by 194.69% in the past year. This is a very strong growth!
NVDA shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 39.06% yearly.
The Earnings Per Share is expected to grow by 35.09% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 32.85% on average over the next years. This is a very strong growth

How do we evaluate the Valuation for NASDAQ:NVDA?

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NASDAQ:NVDA has achieved a 5 out of 10:

Based on the Price/Free Cash Flow ratio, NVDA is valued a bit cheaper than 62.04% of the companies in the same industry.
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.
NVDA's earnings are expected to grow with 51.82% in the coming years. This may justify a more expensive valuation.

Health Analysis for NASDAQ:NVDA

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:NVDA, the assigned 8 reflects its health status:

An Altman-Z score of 69.92 indicates that NVDA is not in any danger for bankruptcy at the moment.
NVDA has a better Altman-Z score (69.92) than 99.07% of its industry peers.
NVDA has a debt to FCF ratio of 0.18. This is a very positive value and a sign of high solvency as it would only need 0.18 years to pay back of all of its debts.
NVDA's Debt to FCF ratio of 0.18 is amongst the best of the industry. NVDA outperforms 83.33% of its industry peers.
NVDA has a Debt/Equity ratio of 0.15. This is a healthy value indicating a solid balance between debt and equity.
NVDA has a Current Ratio of 4.27. This indicates that NVDA is financially healthy and has no problem in meeting its short term obligations.
NVDA's Current ratio of 4.27 is fine compared to the rest of the industry. NVDA outperforms 64.81% of its industry peers.
A Quick Ratio of 3.79 indicates that NVDA has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 3.79, NVDA is in the better half of the industry, outperforming 70.37% of the companies in the same industry.

What does the Profitability looks like for NASDAQ:NVDA

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:NVDA, the assigned 10 is noteworthy for profitability:

NVDA has a Return On Assets of 62.20%. This is amongst the best in the industry. NVDA outperforms 100.00% of its industry peers.
NVDA has a Return On Equity of 91.15%. This is amongst the best in the industry. NVDA outperforms 100.00% of its industry peers.
NVDA has a Return On Invested Capital of 73.58%. This is amongst the best in the industry. NVDA outperforms 100.00% of its industry peers.
NVDA had an Average Return On Invested Capital over the past 3 years of 31.07%. This is significantly above the industry average of 10.76%.
The last Return On Invested Capital (73.58%) for NVDA is above the 3 year average (31.07%), which is a sign of increasing profitability.
Looking at the Profit Margin, with a value of 55.04%, NVDA belongs to the top of the industry, outperforming 99.07% of the companies in the same industry.
In the last couple of years the Profit Margin of NVDA has grown nicely.
The Operating Margin of NVDA (61.87%) is better than 99.07% of its industry peers.
In the last couple of years the Operating Margin of NVDA has grown nicely.
NVDA's Gross Margin of 75.98% is amongst the best of the industry. NVDA outperforms 94.44% of its industry peers.
In the last couple of years the Gross Margin of NVDA has grown nicely.

More Affordable Growth stocks can be found in our Affordable Growth screener.

Check the latest full fundamental report of NVDA for a complete fundamental analysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.