NASDAQ:NVDA is not too expensive for the growth it is showing.

Last update: Dec 17, 2024

Consider NVIDIA CORP (NASDAQ:NVDA) as an affordable growth stock, identified by our stock screening tool. NASDAQ:NVDA is showcasing impressive growth figures and is well-positioned in terms of profitability, solvency, and liquidity. Moreover, it seems to be priced reasonably. Let's dive deeper into the analysis.

What does the Growth looks like 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:

NVDA shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 201.27%, 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 152.44%.
The Revenue has been growing by 39.06% on average over the past years. This is a very strong growth!
Based on estimates for the next years, NVDA will show a very strong growth in Earnings Per Share. The EPS will grow by 35.63% on average per year.
Based on estimates for the next years, NVDA will show a very strong growth in Revenue. The Revenue will grow by 35.61% on average per year.

ChartMill's Evaluation of Valuation

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:NVDA has received a 5 out of 10:

68.52% of the companies in the same industry are more expensive than NVDA, based on the Price/Free Cash Flow ratio.
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 63.71% in the coming years.

Health Assessment of NASDAQ:NVDA

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:NVDA was assigned a score of 8 for health:

NVDA has an Altman-Z score of 69.46. This indicates that NVDA is financially healthy and has little risk of bankruptcy at the moment.
NVDA has a better Altman-Z score (69.46) than 97.22% of its industry peers.
NVDA has a debt to FCF ratio of 0.15. This is a very positive value and a sign of high solvency as it would only need 0.15 years to pay back of all of its debts.
NVDA has a Debt to FCF ratio of 0.15. This is amongst the best in the industry. NVDA outperforms 85.19% of its industry peers.
A Debt/Equity ratio of 0.13 indicates that NVDA is not too dependend on debt financing.
A Current Ratio of 4.10 indicates that NVDA has no problem at all paying its short term obligations.
The Current ratio of NVDA (4.10) is better than 65.74% of its industry peers.
A Quick Ratio of 3.64 indicates that NVDA has no problem at all paying its short term obligations.
With a decent Quick ratio value of 3.64, NVDA is doing good in 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:

The Return On Assets of NVDA (65.69%) is better than 100.00% of its industry peers.
NVDA has a better Return On Equity (95.71%) than 100.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 78.60%, NVDA belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
NVDA had an Average Return On Invested Capital over the past 3 years of 31.07%. This is significantly above the industry average of 11.25%.
The 3 year average ROIC (31.07%) for NVDA is below the current ROIC(78.60%), indicating increased profibility in the last year.
With an excellent Profit Margin value of 55.69%, NVDA belongs to the best 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.
NVDA's Operating Margin of 62.71% is amongst the best of the industry. NVDA outperforms 99.07% of its industry peers.
NVDA's Operating Margin has improved in the last couple of years.
NVDA has a Gross Margin of 75.86%. This is amongst the best in the industry. NVDA outperforms 94.44% of its industry peers.
NVDA's Gross Margin has improved in the last couple of years.

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

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.