Intrinsic value of NVIDIA - NVDA

Previous Close

$248.20

  Intrinsic Value

$676.28

stock screener

  Rating & Target

str. buy

+172%

Previous close

$248.20

 
Intrinsic value

$676.28

 
Up/down potential

+172%

 
Rating

str. buy

We calculate the intrinsic value of NVDA stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  37.92
  40.60
  37.04
  33.84
  30.95
  28.36
  26.02
  23.92
  22.03
  20.32
  18.79
  17.41
  16.17
  15.05
  14.05
  13.14
  12.33
  11.60
  10.94
  10.34
  9.81
  9.33
  8.90
  8.51
  8.16
  7.84
  7.56
  7.30
  7.07
  6.86
  6.68
Revenue, $m
  6,910
  13,658
  18,717
  25,050
  32,803
  42,105
  53,062
  65,754
  80,238
  96,546
  114,689
  134,659
  156,436
  179,987
  205,273
  232,254
  260,891
  291,145
  322,988
  356,396
  391,355
  427,861
  465,921
  505,551
  546,780
  589,646
  634,198
  680,495
  728,607
  778,612
  830,598
Variable operating expenses, $m
 
  7,416
  10,139
  13,546
  17,719
  22,724
  28,620
  35,449
  43,243
  52,018
  61,781
  72,461
  84,179
  96,851
  110,458
  124,977
  140,386
  156,666
  173,801
  191,778
  210,589
  230,233
  250,713
  272,038
  294,224
  317,290
  341,263
  366,176
  392,065
  418,973
  446,947
Fixed operating expenses, $m
 
  1,265
  1,293
  1,322
  1,351
  1,380
  1,411
  1,442
  1,473
  1,506
  1,539
  1,573
  1,607
  1,643
  1,679
  1,716
  1,754
  1,792
  1,832
  1,872
  1,913
  1,955
  1,998
  2,042
  2,087
  2,133
  2,180
  2,228
  2,277
  2,327
  2,378
Total operating expenses, $m
  4,976
  8,681
  11,432
  14,868
  19,070
  24,104
  30,031
  36,891
  44,716
  53,524
  63,320
  74,034
  85,786
  98,494
  112,137
  126,693
  142,140
  158,458
  175,633
  193,650
  212,502
  232,188
  252,711
  274,080
  296,311
  319,423
  343,443
  368,404
  394,342
  421,300
  449,325
Operating income, $m
  1,934
  4,976
  7,285
  10,182
  13,734
  18,001
  23,031
  28,863
  35,521
  43,021
  51,368
  60,626
  70,650
  81,493
  93,136
  105,562
  118,751
  132,687
  147,356
  162,746
  178,853
  195,673
  213,209
  231,470
  250,469
  270,223
  290,754
  312,091
  334,265
  357,312
  381,273
EBITDA, $m
  2,121
  5,248
  7,633
  10,625
  14,293
  18,700
  23,894
  29,916
  36,792
  44,536
  53,156
  62,646
  72,996
  84,192
  96,215
  109,046
  122,664
  137,054
  152,201
  168,092
  184,723
  202,091
  220,198
  239,054
  258,671
  279,067
  300,267
  322,298
  345,194
  368,991
  393,732
Interest expense (income), $m
  13
  107
  189
  295
  427
  589
  783
  1,011
  1,276
  1,578
  1,918
  2,297
  2,713
  3,168
  3,659
  4,186
  4,749
  5,347
  5,978
  6,642
  7,339
  8,068
  8,829
  9,623
  10,450
  11,310
  12,204
  13,134
  14,099
  15,103
  16,146
Earnings before tax, $m
  1,905
  4,869
  7,096
  9,887
  13,307
  17,412
  22,249
  27,852
  34,245
  41,443
  49,450
  58,329
  67,937
  78,325
  89,477
  101,375
  114,002
  127,341
  141,378
  156,105
  171,514
  187,605
  204,380
  221,847
  240,019
  258,913
  278,550
  298,957
  320,165
  342,209
  365,127
Tax expense, $m
  239
  1,315
  1,916
  2,670
  3,593
  4,701
  6,007
  7,520
  9,246
  11,190
  13,352
  15,749
  18,343
  21,148
  24,159
  27,371
  30,781
  34,382
  38,172
  42,148
  46,309
  50,653
  55,183
  59,899
  64,805
  69,906
  75,208
  80,718
  86,445
  92,396
  98,584
Net income, $m
  1,666
  3,554
  5,180
  7,218
  9,714
  12,711
  16,242
  20,332
  24,999
  30,254
  36,099
  42,580
  49,594
  57,177
  65,318
  74,004
  83,221
  92,959
  103,206
  113,956
  125,205
  136,952
  149,197
  161,948
  175,214
  189,006
  203,341
  218,239
  233,721
  249,812
  266,543

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  6,798
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  9,841
  7,431
  10,183
  13,629
  17,847
  22,908
  28,869
  35,775
  43,655
  52,528
  62,399
  73,264
  85,112
  97,925
  111,683
  126,363
  141,943
  158,403
  175,728
  193,904
  212,924
  232,786
  253,493
  275,055
  297,486
  320,808
  345,048
  370,237
  396,413
  423,619
  451,903
Adjusted assets (=assets-cash), $m
  3,043
  7,431
  10,183
  13,629
  17,847
  22,908
  28,869
  35,775
  43,655
  52,528
  62,399
  73,264
  85,112
  97,925
  111,683
  126,363
  141,943
  158,403
  175,728
  193,904
  212,924
  232,786
  253,493
  275,055
  297,486
  320,808
  345,048
  370,237
  396,413
  423,619
  451,903
Revenue / Adjusted assets
  2.271
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
  1.838
Average production assets, $m
  629
  2,049
  2,808
  3,757
  4,920
  6,316
  7,959
  9,863
  12,036
  14,482
  17,203
  20,199
  23,465
  26,998
  30,791
  34,838
  39,134
  43,672
  48,448
  53,459
  58,703
  64,179
  69,888
  75,833
  82,017
  88,447
  95,130
  102,074
  109,291
  116,792
  124,590
Working capital, $m
  6,748
  287
  393
  526
  689
  884
  1,114
  1,381
  1,685
  2,027
  2,408
  2,828
  3,285
  3,780
  4,311
  4,877
  5,479
  6,114
  6,783
  7,484
  8,218
  8,985
  9,784
  10,617
  11,482
  12,383
  13,318
  14,290
  15,301
  16,351
  17,443
Total debt, $m
  2,816
  3,506
  5,460
  7,906
  10,902
  14,495
  18,727
  23,630
  29,225
  35,525
  42,533
  50,247
  58,660
  67,757
  77,525
  87,947
  99,009
  110,696
  122,997
  135,902
  149,406
  163,508
  178,210
  193,519
  209,445
  226,004
  243,214
  261,098
  279,683
  299,000
  319,081
Total liabilities, $m
  4,079
  5,276
  7,230
  9,676
  12,672
  16,265
  20,497
  25,400
  30,995
  37,295
  44,303
  52,017
  60,430
  69,527
  79,295
  89,717
  100,779
  112,466
  124,767
  137,672
  151,176
  165,278
  179,980
  195,289
  211,215
  227,774
  244,984
  262,868
  281,453
  300,770
  320,851
Total equity, $m
  5,762
  2,155
  2,953
  3,952
  5,176
  6,643
  8,372
  10,375
  12,660
  15,233
  18,096
  21,247
  24,682
  28,398
  32,388
  36,645
  41,163
  45,937
  50,961
  56,232
  61,748
  67,508
  73,513
  79,766
  86,271
  93,034
  100,064
  107,369
  114,960
  122,850
  131,052
Total liabilities and equity, $m
  9,841
  7,431
  10,183
  13,628
  17,848
  22,908
  28,869
  35,775
  43,655
  52,528
  62,399
  73,264
  85,112
  97,925
  111,683
  126,362
  141,942
  158,403
  175,728
  193,904
  212,924
  232,786
  253,493
  275,055
  297,486
  320,808
  345,048
  370,237
  396,413
  423,620
  451,903
Debt-to-equity ratio
  0.489
  1.630
  1.850
  2.000
  2.110
  2.180
  2.240
  2.280
  2.310
  2.330
  2.350
  2.360
  2.380
  2.390
  2.390
  2.400
  2.410
  2.410
  2.410
  2.420
  2.420
  2.420
  2.420
  2.430
  2.430
  2.430
  2.430
  2.430
  2.430
  2.430
  2.430
Adjusted equity ratio
  -0.340
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,666
  3,554
  5,180
  7,218
  9,714
  12,711
  16,242
  20,332
  24,999
  30,254
  36,099
  42,580
  49,594
  57,177
  65,318
  74,004
  83,221
  92,959
  103,206
  113,956
  125,205
  136,952
  149,197
  161,948
  175,214
  189,006
  203,341
  218,239
  233,721
  249,812
  266,543
Depreciation, amort., depletion, $m
  187
  272
  348
  443
  559
  699
  863
  1,053
  1,271
  1,515
  1,787
  2,020
  2,347
  2,700
  3,079
  3,484
  3,913
  4,367
  4,845
  5,346
  5,870
  6,418
  6,989
  7,583
  8,202
  8,845
  9,513
  10,207
  10,929
  11,679
  12,459
Funds from operations, $m
  993
  3,826
  5,528
  7,660
  10,273
  13,410
  17,104
  21,385
  26,269
  31,769
  37,886
  44,600
  51,940
  59,877
  68,397
  77,488
  87,135
  97,326
  108,051
  119,302
  131,076
  143,369
  156,186
  169,532
  183,416
  197,851
  212,854
  228,446
  244,650
  261,492
  279,002
Change in working capital, $m
  -679
  83
  106
  133
  163
  195
  230
  267
  304
  342
  381
  419
  457
  495
  531
  567
  601
  635
  669
  702
  734
  767
  799
  832
  866
  900
  936
  972
  1,010
  1,050
  1,092
Cash from operations, $m
  1,672
  3,743
  5,421
  7,527
  10,110
  13,214
  16,874
  21,118
  25,965
  31,426
  37,505
  44,181
  51,483
  59,382
  67,866
  76,921
  86,533
  96,690
  107,382
  118,601
  130,341
  142,603
  155,387
  168,699
  182,550
  196,951
  211,919
  227,474
  243,639
  260,442
  277,910
Maintenance CAPEX, $m
  0
  -146
  -205
  -281
  -376
  -492
  -632
  -796
  -986
  -1,204
  -1,448
  -1,720
  -2,020
  -2,347
  -2,700
  -3,079
  -3,484
  -3,913
  -4,367
  -4,845
  -5,346
  -5,870
  -6,418
  -6,989
  -7,583
  -8,202
  -8,845
  -9,513
  -10,207
  -10,929
  -11,679
New CAPEX, $m
  -176
  -594
  -759
  -950
  -1,163
  -1,395
  -1,643
  -1,904
  -2,173
  -2,446
  -2,721
  -2,996
  -3,266
  -3,533
  -3,793
  -4,047
  -4,295
  -4,538
  -4,776
  -5,011
  -5,244
  -5,476
  -5,709
  -5,945
  -6,184
  -6,430
  -6,683
  -6,945
  -7,217
  -7,501
  -7,798
Cash from investing activities, $m
  -793
  -740
  -964
  -1,231
  -1,539
  -1,887
  -2,275
  -2,700
  -3,159
  -3,650
  -4,169
  -4,716
  -5,286
  -5,880
  -6,493
  -7,126
  -7,779
  -8,451
  -9,143
  -9,856
  -10,590
  -11,346
  -12,127
  -12,934
  -13,767
  -14,632
  -15,528
  -16,458
  -17,424
  -18,430
  -19,477
Free cash flow, $m
  879
  3,004
  4,458
  6,297
  8,572
  11,327
  14,599
  18,419
  22,806
  27,776
  33,335
  39,465
  46,197
  53,503
  61,374
  69,795
  78,754
  88,239
  98,239
  108,745
  119,752
  131,257
  143,260
  155,766
  168,782
  182,319
  196,391
  211,016
  226,215
  242,012
  258,433
Issuance/(repayment) of debt, $m
  1,315
  1,521
  1,954
  2,446
  2,995
  3,593
  4,232
  4,903
  5,595
  6,300
  7,008
  7,714
  8,412
  9,097
  9,768
  10,423
  11,062
  11,687
  12,301
  12,905
  13,504
  14,102
  14,702
  15,309
  15,926
  16,559
  17,210
  17,884
  18,585
  19,316
  20,082
Issuance/(repurchase) of shares, $m
  -748
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  552
  1,521
  1,954
  2,446
  2,995
  3,593
  4,232
  4,903
  5,595
  6,300
  7,008
  7,714
  8,412
  9,097
  9,768
  10,423
  11,062
  11,687
  12,301
  12,905
  13,504
  14,102
  14,702
  15,309
  15,926
  16,559
  17,210
  17,884
  18,585
  19,316
  20,082
Total cash flow (excl. dividends), $m
  1,431
  4,525
  6,412
  8,743
  11,567
  14,920
  18,832
  23,321
  28,401
  34,076
  40,344
  47,179
  54,609
  62,601
  71,142
  80,218
  89,816
  99,926
  110,539
  121,650
  133,256
  145,358
  157,962
  171,075
  184,708
  198,878
  213,601
  228,901
  244,800
  261,328
  278,515
Retained Cash Flow (-), $m
  -1,293
  -624
  -798
  -999
  -1,223
  -1,468
  -1,729
  -2,003
  -2,285
  -2,573
  -2,863
  -3,151
  -3,436
  -3,716
  -3,990
  -4,257
  -4,518
  -4,774
  -5,024
  -5,271
  -5,516
  -5,760
  -6,005
  -6,253
  -6,505
  -6,763
  -7,029
  -7,305
  -7,591
  -7,890
  -8,202
Prev. year cash balance distribution, $m
 
  5,940
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  389
  546
  749
  1,002
  1,312
  1,684
  2,122
  2,630
  3,210
  3,862
  4,588
  5,386
  6,257
  7,199
  8,211
  9,290
  10,436
  11,646
  12,920
  14,256
  15,654
  17,114
  18,637
  20,222
  21,871
  23,586
  25,368
  27,220
  29,144
  31,144
Cash available for distribution, $m
 
  9,841
  5,614
  7,744
  10,343
  13,453
  17,103
  21,319
  26,116
  31,503
  37,481
  44,028
  51,173
  58,885
  67,152
  75,960
  85,298
  95,152
  105,515
  116,379
  127,740
  139,599
  151,957
  164,822
  178,203
  192,114
  206,572
  221,596
  237,209
  253,438
  270,312
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  9,436
  5,139
  6,739
  8,517
  10,427
  12,412
  14,403
  16,323
  18,097
  19,650
  20,908
  21,837
  22,389
  22,544
  22,301
  21,676
  20,704
  19,432
  17,919
  16,232
  14,439
  12,608
  10,803
  9,076
  7,474
  6,027
  4,756
  3,670
  2,767
  2,035
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Nvidia Corporation focuses on personal computer (PC) graphics, graphics processing unit (GPU) and also on artificial intelligence (AI). The Company's operates through two segments: GPU and Tegra Processor. The Company's GPU product brands are aimed at specialized markets, including GeForce for gamers; Quadro for designers; Tesla and DGX for AI data scientists and big data researchers; and GRID for cloud-based visual computing users. The Company's Tegra brand integrates an entire computer onto a single chip, and incorporates GPUs and multi-core central processing units (CPUs) to drive supercomputing for mobile gaming and entertainment devices, as well as autonomous robots, drones and cars. The Company's processor has created platforms that address four markets: Gaming, Professional Visualization, Datacenter, and Automotive. The Company's offerings include NVIDIA DGX AI supercomputer, the NVIDIA DRIVE AI car computing platform and the GeForce NOW cloud gaming service.

FINANCIAL RATIOS  of  NVIDIA (NVDA)

Valuation Ratios
P/E Ratio 87.2
Price to Sales 21
Price to Book 25.2
Price to Tangible Book
Price to Cash Flow 86.8
Price to Free Cash Flow 97.1
Growth Rates
Sales Growth Rate 37.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 104.7%
Cap. Spend. - 3 Yr. Gr. Rate -7.1%
Financial Strength
Quick Ratio 9
Current Ratio 0
LT Debt to Equity 35.1%
Total Debt to Equity 48.9%
Interest Coverage 148
Management Effectiveness
Return On Assets 19.5%
Ret/ On Assets - 3 Yr. Avg. 12.3%
Return On Total Capital 22.9%
Ret/ On T. Cap. - 3 Yr. Avg. 14.7%
Return On Equity 32.6%
Return On Equity - 3 Yr. Avg. 20.2%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 58.8%
Gross Margin - 3 Yr. Avg. 56.8%
EBITDA Margin 30.5%
EBITDA Margin - 3 Yr. Avg. 23.6%
Operating Margin 28%
Oper. Margin - 3 Yr. Avg. 19.7%
Pre-Tax Margin 27.6%
Pre-Tax Margin - 3 Yr. Avg. 19.5%
Net Profit Margin 24.1%
Net Profit Margin - 3 Yr. Avg. 16.6%
Effective Tax Rate 12.5%
Eff/ Tax Rate - 3 Yr. Avg. 15.4%
Payout Ratio 15.7%

NVDA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NVDA stock intrinsic value calculation we used $9714 million for the last fiscal year's total revenue generated by NVIDIA. The default revenue input number comes from 2017 income statement of NVIDIA. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NVDA stock valuation model: a) initial revenue growth rate of 40.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for NVDA is calculated based on our internal credit rating of NVIDIA, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of NVIDIA.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NVDA stock the variable cost ratio is equal to 54.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1238 million in the base year in the intrinsic value calculation for NVDA stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for NVIDIA.

Corporate tax rate of 27% is the nominal tax rate for NVIDIA. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NVDA stock is equal to 4%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NVDA are equal to 15%.

Life of production assets of 10 years is the average useful life of capital assets used in NVIDIA operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NVDA is equal to 2.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $7471 million for NVIDIA - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 599 million for NVIDIA is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of NVIDIA at the current share price and the inputted number of shares is $148.7 billion.

Articles on NVDA

NVIDIA Corporation soon to be acquired?

NVIDIA Corporation is set to dominate not just the next-generation chips for the gaming market, but also power the next major wave, or rather revolution, of technological innovation – artificial intelligence.  [June 06, 2017]  read article

NVIDIA is set to beat the market again

Despite a spectacular run last year, when the share price increased close to four-fold, the company’s stock has potential for farther three-fold increase.  [March 20, 2017]  read article

RELATED COMPANIES Price Int.Val. Rating
AMD Advanced Micro 16.58 78.97  str.buy
AMBA Ambarella 37.62 29.31  sell
QCOM Qualcomm 58.35 64.10  hold
TXN Texas Instrume 114.56 144.87  buy
PXLW Pixelworks 3.57 40.50  str.buy
MSFT Microsoft 104.91 60.61  sell
INTC Intel 52.01 28.34  sell
MRVL Marvell Techno 21.15 5.10  str.sell

COMPANY NEWS

▶ Chip Stock Investors Find a Bit of Cheer   [03:52PM  Barrons.com]
▶ Stock-Picking is a Cult   [Jul-18-18 04:29PM  Zacks]
▶ 3 Franchise Tech Stocks to Bet It All On   [10:45AM  TheStreet.com]
▶ Which Stocks Make This List Of The Fastest-Growing Companies?   [04:07PM  Investor's Business Daily]
▶ Jim Cramer: Money on the Sidelines   [11:17AM  TheStreet.com]
▶ Bull of the Day: Mellanox (MLNX)   [05:00AM  Zacks]
▶ Broadcom Stock Is A Knife Worth Catching   [12:06PM  InvestorPlace]
▶ Why AMD Stock Will Rally Before Its Earnings Announcement   [Jul-11-18 11:58PM  InvestorPlace]
▶ 5 Top Stock Trades for Wednesday Morning   [04:01PM  InvestorPlace]
▶ Better Buy: Qualcomm Inc (QCOM) vs. NVIDIA (NVDA)   [Jul-09-18 08:46PM  Motley Fool]
▶ Top 3 Shareholders of AMD   [11:47AM  Investopedia]
▶ Nvidia: Watching and Waiting for Next Shoe in Trade War   [Jul-06-18 04:58PM  Barrons.com]
▶ Will This Move Prove Costly for AMD's GPU Business?   [Jul-04-18 06:17PM  Motley Fool]
▶ New Nvidia Gaming Processor Coming Soon To Give Sales A Boost   [02:17PM  Investor's Business Daily]
▶ Bull of the Day: NVIDIA (NVDA)   [06:01AM  Zacks]
▶ Better Buy: Micron (MU) vs. Nvidia (NVDA) Stock   [Jul-02-18 05:44PM  Zacks]
Financial statements of NVDA
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.