Intrinsic value of NVIDIA - NVDA

Previous Close

$233.69

  Intrinsic Value

$368.13

stock screener

  Rating & Target

str. buy

+58%

Previous close

$233.69

 
Intrinsic value

$368.13

 
Up/down potential

+58%

 
Rating

str. buy

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

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
  31.50
  28.85
  26.47
  24.32
  22.39
  20.65
  19.08
  17.67
  16.41
  15.27
  14.24
  13.32
  12.48
  11.74
  11.06
  10.46
  9.91
  9.42
  8.98
  8.58
  8.22
  7.90
  7.61
  7.35
  7.11
  6.90
  6.71
  6.54
  6.39
  6.25
Revenue, $m
  6,910
  9,087
  11,708
  14,807
  18,407
  22,528
  27,180
  32,367
  38,088
  44,337
  51,105
  58,383
  66,157
  74,416
  83,150
  92,348
  102,004
  112,113
  122,674
  133,687
  145,157
  157,091
  169,501
  182,399
  195,803
  209,732
  224,209
  239,258
  254,908
  271,189
  288,133
Variable operating expenses, $m
 
  3,388
  4,348
  5,482
  6,800
  8,308
  10,011
  11,910
  14,004
  16,292
  18,769
  21,371
  24,217
  27,241
  30,438
  33,805
  37,339
  41,040
  44,906
  48,937
  53,136
  57,504
  62,047
  66,768
  71,675
  76,774
  82,073
  87,582
  93,311
  99,270
  105,473
Fixed operating expenses, $m
 
  2,504
  2,567
  2,631
  2,697
  2,764
  2,833
  2,904
  2,977
  3,051
  3,127
  3,205
  3,286
  3,368
  3,452
  3,538
  3,627
  3,717
  3,810
  3,906
  4,003
  4,103
  4,206
  4,311
  4,419
  4,529
  4,642
  4,758
  4,877
  4,999
  5,124
Total operating expenses, $m
  4,976
  5,892
  6,915
  8,113
  9,497
  11,072
  12,844
  14,814
  16,981
  19,343
  21,896
  24,576
  27,503
  30,609
  33,890
  37,343
  40,966
  44,757
  48,716
  52,843
  57,139
  61,607
  66,253
  71,079
  76,094
  81,303
  86,715
  92,340
  98,188
  104,269
  110,597
Operating income, $m
  1,934
  3,195
  4,794
  6,694
  8,911
  11,456
  14,336
  17,553
  21,107
  24,994
  29,209
  33,806
  38,654
  43,808
  49,260
  55,005
  61,038
  67,356
  73,958
  80,844
  88,018
  95,484
  103,248
  111,320
  119,709
  128,429
  137,493
  146,918
  156,720
  166,919
  177,536
EBITDA, $m
  2,121
  3,380
  5,015
  6,957
  9,223
  11,824
  14,767
  18,054
  21,686
  25,658
  29,965
  34,599
  39,553
  44,819
  50,390
  56,260
  62,424
  68,879
  75,624
  82,660
  89,990
  97,617
  105,550
  113,797
  122,369
  131,278
  140,539
  150,167
  160,182
  170,602
  181,449
Interest expense (income), $m
  13
  71
  82
  118
  161
  211
  268
  333
  405
  484
  571
  665
  766
  873
  988
  1,109
  1,237
  1,371
  1,511
  1,657
  1,810
  1,969
  2,135
  2,307
  2,486
  2,672
  2,865
  3,066
  3,274
  3,492
  3,717
Earnings before tax, $m
  1,905
  3,124
  4,712
  6,576
  8,750
  11,245
  14,067
  17,220
  20,702
  24,510
  28,638
  33,141
  37,889
  42,935
  48,272
  53,896
  59,802
  65,986
  72,447
  79,187
  86,208
  93,515
  101,113
  109,013
  117,224
  125,758
  134,628
  143,852
  153,445
  163,427
  173,818
Tax expense, $m
  239
  843
  1,272
  1,775
  2,362
  3,036
  3,798
  4,649
  5,590
  6,618
  7,732
  8,948
  10,230
  11,592
  13,034
  14,552
  16,146
  17,816
  19,561
  21,380
  23,276
  25,249
  27,301
  29,434
  31,650
  33,955
  36,350
  38,840
  41,430
  44,125
  46,931
Net income, $m
  1,666
  2,280
  3,440
  4,800
  6,387
  8,209
  10,269
  12,571
  15,113
  17,892
  20,906
  24,193
  27,659
  31,342
  35,239
  39,344
  43,655
  48,169
  52,886
  57,807
  62,932
  68,266
  73,813
  79,579
  85,573
  91,803
  98,279
  105,012
  112,015
  119,302
  126,887

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
  4,001
  5,156
  6,520
  8,105
  9,920
  11,968
  14,252
  16,771
  19,523
  22,503
  25,708
  29,131
  32,768
  36,614
  40,664
  44,916
  49,367
  54,017
  58,867
  63,918
  69,173
  74,637
  80,317
  86,219
  92,352
  98,727
  105,354
  112,245
  119,414
  126,875
Adjusted assets (=assets-cash), $m
  3,043
  4,001
  5,156
  6,520
  8,105
  9,920
  11,968
  14,252
  16,771
  19,523
  22,503
  25,708
  29,131
  32,768
  36,614
  40,664
  44,916
  49,367
  54,017
  58,867
  63,918
  69,173
  74,637
  80,317
  86,219
  92,352
  98,727
  105,354
  112,245
  119,414
  126,875
Revenue / Adjusted assets
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
  2.271
Average production assets, $m
  629
  827
  1,065
  1,347
  1,675
  2,050
  2,473
  2,945
  3,466
  4,035
  4,651
  5,313
  6,020
  6,772
  7,567
  8,404
  9,282
  10,202
  11,163
  12,165
  13,209
  14,295
  15,425
  16,598
  17,818
  19,086
  20,403
  21,772
  23,197
  24,678
  26,220
Working capital, $m
  6,748
  981
  1,264
  1,599
  1,988
  2,433
  2,935
  3,496
  4,113
  4,788
  5,519
  6,305
  7,145
  8,037
  8,980
  9,974
  11,016
  12,108
  13,249
  14,438
  15,677
  16,966
  18,306
  19,699
  21,147
  22,651
  24,215
  25,840
  27,530
  29,288
  31,118
Total debt, $m
  2,816
  2,338
  3,377
  4,605
  6,032
  7,665
  9,508
  11,564
  13,831
  16,308
  18,990
  21,874
  24,955
  28,228
  31,689
  35,335
  39,161
  43,168
  47,353
  51,717
  56,263
  60,992
  65,910
  71,022
  76,334
  81,854
  87,591
  93,555
  99,757
  106,209
  112,924
Total liabilities, $m
  4,079
  3,601
  4,640
  5,868
  7,295
  8,928
  10,771
  12,827
  15,094
  17,571
  20,253
  23,137
  26,218
  29,491
  32,952
  36,598
  40,424
  44,431
  48,616
  52,980
  57,526
  62,255
  67,173
  72,285
  77,597
  83,117
  88,854
  94,818
  101,020
  107,472
  114,187
Total equity, $m
  5,762
  400
  516
  652
  811
  992
  1,197
  1,425
  1,677
  1,952
  2,250
  2,571
  2,913
  3,277
  3,661
  4,066
  4,492
  4,937
  5,402
  5,887
  6,392
  6,917
  7,464
  8,032
  8,622
  9,235
  9,873
  10,535
  11,224
  11,941
  12,687
Total liabilities and equity, $m
  9,841
  4,001
  5,156
  6,520
  8,106
  9,920
  11,968
  14,252
  16,771
  19,523
  22,503
  25,708
  29,131
  32,768
  36,613
  40,664
  44,916
  49,368
  54,018
  58,867
  63,918
  69,172
  74,637
  80,317
  86,219
  92,352
  98,727
  105,353
  112,244
  119,413
  126,874
Debt-to-equity ratio
  0.489
  5.840
  6.550
  7.060
  7.440
  7.730
  7.940
  8.110
  8.250
  8.350
  8.440
  8.510
  8.570
  8.610
  8.660
  8.690
  8.720
  8.740
  8.770
  8.790
  8.800
  8.820
  8.830
  8.840
  8.850
  8.860
  8.870
  8.880
  8.890
  8.890
  8.900
Adjusted equity ratio
  -0.340
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,666
  2,280
  3,440
  4,800
  6,387
  8,209
  10,269
  12,571
  15,113
  17,892
  20,906
  24,193
  27,659
  31,342
  35,239
  39,344
  43,655
  48,169
  52,886
  57,807
  62,932
  68,266
  73,813
  79,579
  85,573
  91,803
  98,279
  105,012
  112,015
  119,302
  126,887
Depreciation, amort., depletion, $m
  187
  185
  221
  263
  312
  368
  431
  501
  579
  664
  756
  793
  899
  1,011
  1,129
  1,254
  1,385
  1,523
  1,666
  1,816
  1,972
  2,134
  2,302
  2,477
  2,659
  2,849
  3,045
  3,250
  3,462
  3,683
  3,913
Funds from operations, $m
  993
  2,466
  3,661
  5,063
  6,699
  8,576
  10,700
  13,072
  15,692
  18,556
  21,662
  24,986
  28,557
  32,353
  36,368
  40,598
  45,041
  49,692
  54,553
  59,622
  64,903
  70,399
  76,115
  82,057
  88,233
  94,652
  101,324
  108,262
  115,477
  122,985
  130,801
Change in working capital, $m
  -679
  235
  283
  335
  389
  445
  502
  560
  618
  675
  731
  786
  840
  892
  943
  993
  1,043
  1,092
  1,141
  1,189
  1,239
  1,289
  1,340
  1,393
  1,448
  1,504
  1,563
  1,625
  1,690
  1,758
  1,830
Cash from operations, $m
  1,672
  2,231
  3,377
  4,729
  6,310
  8,131
  10,198
  12,512
  15,074
  17,881
  20,931
  24,200
  27,718
  31,461
  35,425
  39,605
  43,998
  48,600
  53,412
  58,433
  63,665
  69,110
  74,775
  80,664
  86,785
  93,147
  99,761
  106,636
  113,787
  121,227
  128,971
Maintenance CAPEX, $m
  0
  -94
  -123
  -159
  -201
  -250
  -306
  -369
  -440
  -517
  -602
  -694
  -793
  -899
  -1,011
  -1,129
  -1,254
  -1,385
  -1,523
  -1,666
  -1,816
  -1,972
  -2,134
  -2,302
  -2,477
  -2,659
  -2,849
  -3,045
  -3,250
  -3,462
  -3,683
New CAPEX, $m
  -176
  -198
  -239
  -282
  -328
  -375
  -423
  -472
  -521
  -569
  -616
  -662
  -707
  -752
  -795
  -837
  -879
  -920
  -961
  -1,002
  -1,044
  -1,086
  -1,129
  -1,174
  -1,220
  -1,268
  -1,317
  -1,369
  -1,424
  -1,482
  -1,542
Cash from investing activities, $m
  -793
  -292
  -362
  -441
  -529
  -625
  -729
  -841
  -961
  -1,086
  -1,218
  -1,356
  -1,500
  -1,651
  -1,806
  -1,966
  -2,133
  -2,305
  -2,484
  -2,668
  -2,860
  -3,058
  -3,263
  -3,476
  -3,697
  -3,927
  -4,166
  -4,414
  -4,674
  -4,944
  -5,225
Free cash flow, $m
  879
  1,938
  3,015
  4,288
  5,781
  7,506
  9,468
  11,671
  14,114
  16,795
  19,713
  22,844
  26,217
  29,811
  33,620
  37,639
  41,865
  46,295
  50,928
  55,765
  60,805
  66,053
  71,512
  77,188
  83,088
  89,220
  95,595
  102,222
  109,113
  116,283
  123,746
Issuance/(repayment) of debt, $m
  1,315
  318
  1,039
  1,228
  1,427
  1,633
  1,843
  2,056
  2,267
  2,477
  2,682
  2,884
  3,081
  3,273
  3,461
  3,645
  3,827
  4,006
  4,185
  4,364
  4,546
  4,730
  4,918
  5,112
  5,312
  5,520
  5,737
  5,964
  6,202
  6,452
  6,715
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
  318
  1,039
  1,228
  1,427
  1,633
  1,843
  2,056
  2,267
  2,477
  2,682
  2,884
  3,081
  3,273
  3,461
  3,645
  3,827
  4,006
  4,185
  4,364
  4,546
  4,730
  4,918
  5,112
  5,312
  5,520
  5,737
  5,964
  6,202
  6,452
  6,715
Total cash flow (excl. dividends), $m
  1,431
  2,256
  4,054
  5,516
  7,208
  9,139
  11,312
  13,726
  16,381
  19,272
  22,395
  25,728
  29,298
  33,084
  37,081
  41,284
  45,691
  50,301
  55,113
  60,129
  65,351
  70,782
  76,430
  82,300
  88,400
  94,740
  101,332
  108,186
  115,315
  122,735
  130,461
Retained Cash Flow (-), $m
  -1,293
  -640
  -115
  -136
  -159
  -181
  -205
  -228
  -252
  -275
  -298
  -320
  -342
  -364
  -385
  -405
  -425
  -445
  -465
  -485
  -505
  -526
  -546
  -568
  -590
  -613
  -637
  -663
  -689
  -717
  -746
Prev. year cash balance distribution, $m
 
  6,002
  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
 
  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 available for distribution, $m
 
  7,618
  3,939
  5,379
  7,050
  8,958
  11,107
  13,498
  16,129
  18,997
  22,097
  25,407
  28,956
  32,720
  36,696
  40,879
  45,266
  49,856
  54,648
  59,644
  64,846
  70,257
  75,883
  81,732
  87,810
  94,127
  100,694
  107,523
  114,626
  122,018
  129,715
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
 
  7,304
  3,606
  4,681
  5,805
  6,944
  8,061
  9,119
  10,081
  10,913
  11,585
  12,066
  12,356
  12,441
  12,319
  12,001
  11,503
  10,848
  10,064
  9,183
  8,240
  7,267
  6,296
  5,357
  4,472
  3,662
  2,938
  2,308
  1,773
  1,332
  977
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 82.1
Price to Sales 19.8
Price to Book 23.7
Price to Tangible Book
Price to Cash Flow 81.8
Price to Free Cash Flow 91.4
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 $6910 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 31.5% 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 37.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2443 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 3.5% 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 0%.

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 9.1%.

Life of production assets of 6.7 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 10.8%. 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 - $5762 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 618.191 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 $144.5 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

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Financial statements of NVDA
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