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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Nvidia Corporation (XNAS:NVDA) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
NVDA
Name:
NVIDIA CORPORATION (XNAS:NVDA)
Sector:
1.58B
Industry:
Semiconductors
CEO:
Mr. Jen-Hsun Huang
Total Employees:
22,473
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 728.88% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF NVIDIA CORPORATION(NVDA) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SEMICONDUCTORS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
136.47
One Month Price Target:
$137.77
Six Month Price Target :
$144.26
Likely Price in One Year's Time:
Ticker:
$152.06
Likely Trading Range Today Under (Normal Volatility)
$135.93
Price Upper limit ($) :
$137.54
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$127.
This week:
$115.3
This month :
$94.14
Other Primary facts
Market Cap:
335.28B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
2.49B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.16%
-18.45%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$180.33
$159.79
$92.61
$113.15
Medium risk (<10%) entry points
Buy Call
Sell Call
$153.11
Buy Put:
Sell Put:
$148.72
$119.78
$124.22
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
NVDA
Sharpe Ratio:
5.34%
Comparison:
NVDA, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 72.60% higher than the industry
& ratio is 134.47% higher than the market/S&P 500 average
Average Returns/Yield of
NVDA
Daily returns:
0.19%
Weekly returns:
0.97%
Monthly returns:
3.89%
Yearly returns:
31.95%
Comparison of returns:
Average annual returns/yield (last 3 years) is 46.06% above industry average
Classification:
NVDA, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.34
Statistical test of Returns:
NVDA has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.47%
Weekly Volatility:
7.76%
Monthly Volatility:
15.53%
Yearly Volatility:
53.79%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.74%
Volatility in last five trading days has been -21.21% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.94%
Weekly VaR:
-15.51%
Monthly VaR:
-31.02%
How Much Can the price of
NVDA
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-25%
Worst case (decline):
>85%
This translates to price declining to:
$102.08
This translates to price declining to:
$20.47
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
NVDA is a 118.95% riskier investment compared to the market/S&P 500 & is 87.57% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -2.16% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
NVDA
Beta in relation to market/S&P 500--1.70
Expected beta in 1 year's time:
1.214
Expected beta in 3 year's time:
1.717
Unlevered (debt free) Beta:
1.266
Beta in relation to Nasdaq (XNAS):
1.603
Beta in relation to all global stocks::
0.967
Beta Comparison & Analysis
Beta of competitors/peers::
1.222
Beta is 39.06% higher than peers
Average Industry Beta:
1.41
Beta is 20.53% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
38.64%
Sustainable growth rate is 39.72% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.319
Alpha is 66.53% above industry average alpha yield
Alpha is 2028% higher than market/& is unsustainably high
Analysis of Cost of Capital of
NVDA
Equity cost of capital:
0.148
Equity cost of capital is 15.48% above industry mean WACC
Unlevered (without debt) cost of capital:
11.02%
Before-tax cost of debt:
3.24%
After-tax cost of debt:
2.56%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.56%
WACC is 12.58% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$11.86
Revenue growth rate per share of (3Y):
18.1
Annual revenue growth rate is 126.31% above the industry average
EPS:
$3.73
Expected Annual growth rate of EPS (3Y):
31.26%
Expected future EPS growth rate is -40.05% lower than the Semiconductors industry
Free cash flow (FCF) per share:
$3.30
Balance sheet equity growth per share: 12.46%
Equity growth rate per share is -12.03% lower than the industry
Debt per share
$2.65
EBITDA per share
$4.49
Valuation Analysis Today of
NVDA
P/E Ratio:
44.75
P/E Ratio of Competitors/Peers:
23.29
P/E ratio is 92.11% higher than main peers & is 7.89% higher than the industry
Stock price/value with industry average P/E ratio: $154.71
NVDA is -11.79% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $127.06
Present value of the expected future dividends only: $15.75
P/S (Price to Sales ratio):
11.5
Price to sales ratio is 41.52% above the industry mean
P/B (Price to book value ratio):
18.1
Price to free cash flow: 41.34
Price to free cash flow ratio is 18.95% higher than the industry
Net income growth rate (3Y):
38.02%
Net income growth rate is -166.38% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 1.05%
Dividend yeild: 0.12%
Previous Dividend: $0.04
Previous adjusted dividend: $0.04
Previous Dividend: $0.16
Expected next dividend best case: $0.09
Expected next dividend worst case: -$0.01
Average dividend payment (long-term): $0.09
Average dividend increase/decrease (growth rate) % per period: 13.64%
Expected next dividend payment date: 29/09/2022
Expected next dividend record date: 09/07/2022
-
Previous dividend payment date: 07/01/2022
Previous dividend record date: 06/09/2022
-
Dividend History:
2022-06-08--$0.04
2021-12-01--$0.04
2021-07-20--$0.04
2022-03-02--$0.04
2021-08-31--$0.04
2021-06-09--$0.04
Dividend growth rate is 413.75% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
35.18%
Net debt to equity ratio:
36.01%
Debt to assets ratio:
21.44%
Net debt to assets ratio:
21.95%
Debt-to-asset ratio is -44.99% below industry average
Ability to repay debt:
Interest coverage ratio:
44.54
Interest coverage ratio is 35.86% more than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.741
Statistical significance of correlation:
NVDA has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.627
Stock price is 18.07% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.627
Correlation of price movement with Nasdaq (^IXIC):
-0.019
Covariance of price movement with the market:
-0.037
Kurtosis
2.218
Returns are more concentrated around the mean (platykurtic), compared to a normal distribution
Skewness of returns:
-0.015
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
NVDA
Gross Profit Margin Ratio:
261%
Operating Profit Margin Ratio:
33.69%
Operating profit margin is 43.20% higher than the industry
Net Profit Margin Ratio:
261%
Effective Tax Rate:
2.50%
Effective tax rate is -83.40% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
50.38%
Return on equity (ROE) is 76.19% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
30.72%
Return on assets (ROA) is 133.34% higher than the industry
Financial Leverage:
1.3x
Current Ratio:
4.53
Current ratio is 11.48% above industry average
Cash Conversion Cycle (days):
19
Cash conversion cycle is -65.64% below industry average
The remaining useful life of property plant & equipment is: 1.5 years
Stock based compensation to net income ratio:
4.54%
In-depth Efficiency Analysis
Revenue generated per employee:
1.3M
Each employee generates 112% more revenue than industry average revenue per employee
EBITDA generated per employee:
497.5K
Each employee generates 113% more EBITDA than industry average revenue per employee
Profit generated per employee:
420.9K
Each employee generates 161% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
70.1K
Each employee generates 153% more free cash flow than industry average revenue per employee
Assets/Capital per employee
563.7K
Each employee generates 153% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 38.71%
Growth rate in R&D investment/expenditure is 173.36% higher than the industry
Competitors/Peer firms of
NVDA
ASML Holding NV (XNAS:ASML)
CISCO SYSTEMS, INC. (XNAS:CSCO)
Broadcom Inc. (XNAS:AVGO)
INTEL CORPORATION (XNAS:INTC)
QUALCOMM INCORPORATED (XNAS:QCOM)
TEXAS INSTRUMENTS INCORPORATED (XNAS:TXN)
INTUIT INC. (XNAS:INTU)
ADVANCED MICRO DEVICES, INC. (XNAS:AMD)
APPLIED MATERIALS, INC. (XNAS:AMAT)
Current Analyst Ratings
Strong buy�29%
Buy�58%
Hold�63%
Sell�4%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
5/1/22
Revenue:
29.54B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
10.27B
19.28B
5.73B
-
2.24B
-
-
7.97B
40.00M
251.00M
1.23B
11.18B
9.95B
9.46B
9.70B
243.00M
9.46B
Statement of Cash Flow
Date:
Period:
281.00M
Differed Income Tax :
24.00M
Stock Based Compensation :
429.00M
Change in Working Capital :
- 636000.00K
Accounts Receivables:
- 595000.00K
Other Working Capital:
14.12B
Other Non-Cash Items:
- 136000.00K
Net Cash Provided by Operating Activities:
1.87B
Investments in PP&E:
- 298000.00K
Net Acquisitions:
-
Purchases of Investments:
- 4472000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
5/2/21
2022
Q1
978.00M
11.69B
12.67B
3.02B
1.99B
444.00M
18.13B
3.00B
4.19B
2.61B
146.00M
778.00M
1.94B
12.67B
-
30.80B
1.22B
1.13B
96.00M
333.00M
1.32B
4.00B
6.60B
1.01B
8.02B
-
12.02B
1.00M
20.72B
14.0M
- 1962000.00K
May 2, 2021 at 6:00:00 AM
16.73B
18.77B
30.80B
11.84B
7.74B
6.8B
3.50B
-
- 1272000.00K
-
-
-
- 99000.00K
- 372000.00K
- 471000.00K
-
131.00M
978.00M
847.00M
1.87B
- 298000.00K
1.58B
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
NVDA
2023
2024
2025
2026
2027
$178.32
$198.69
$221.38
$246.67
$274.85