NVIDIA: More Upside After the RallyNVDA) shares have gained an impressive 47% in the past year, which is not surprising if we consider the company’s strong growth in different segments. In fact, the well-diversified product portfolio of NVIDIA offers it with a unique competitive advantage to diversify its market risk and stay way ahead of its key competitors. Moreover, a strong balance sheet allows NVIDIA to increasingly deliver on its commitment to offer excellent shareholder returns.
Focusing on different growth segments
The superior technology platforms of NVIDIA are increasingly driving continued strong company growth which is forecasted to remain solid in the near future.
NVIDIA is believed to be extremely well-positioned to deliver notable company growth, equally spread across all its major operating segments and thus allowing it to offer excellent shareholder returns.
According to Gartner, global consolidated shipments of devices including, mobile phones, ultramobiles, tablets and PCs are estimated to grow 1.5 percent, to reach 2.5 billion units in 2015 compared to last year and down from the last quarter’s growth estimate of 2.8 percent.
Thus, due to its focus on different end markets, most of which are anticipated to grow at an impressive pace, NVIDIA should be able to record strong growth going forward. Another attractive part about the company is that it has an attractive valuation, with a trailing P/E of 29 and a forward P/E ratio of 24. This clearly indicates that NVIDIA’s bottom line will grow in the future.
Moreover, NVIDIA has an impressive profit margin of 11%. Finally, the chipmaker can continue investing in its growth in the long run as it has a strong balance sheet with a robust cash position of $4.50 billion, which easily exceeds its total debt of $1.41 billion. So, NVIDIA looks like a good bet from a long-term perspective given its strong growth prospects and an attractive valuation.
Published on Nov 3, 2015By Vinay Singh