Intrinsic value of NVIDIA - NVDA

Previous Close

$229.17

  Intrinsic Value

$1,990

stock screener

  Rating & Target

str. buy

+768%

Previous close

$229.17

 
Intrinsic value

$1,990

 
Up/down potential

+768%

 
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

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 139.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  15,542
  24,013
  35,911
  52,106
  73,514
  101,064
  135,658
  178,127
  229,207
  289,507
  359,501
  439,525
  529,775
  630,328
  741,154
  862,140
  993,113
  1,133,861
  1,284,157
  1,443,774
  1,612,503
  1,790,170
  1,976,638
  2,171,823
  2,375,696
  2,588,284
  2,809,675
  3,040,019
  3,279,524
  3,528,458
Variable operating expenses, $m
  8,430
  12,988
  19,391
  28,105
  39,625
  54,450
  73,065
  95,918
  123,404
  155,851
  193,449
  236,510
  285,074
  339,181
  398,817
  463,920
  534,397
  610,134
  691,008
  776,899
  867,692
  963,295
  1,063,634
  1,168,664
  1,278,368
  1,392,762
  1,511,894
  1,635,842
  1,764,721
  1,898,673
Fixed operating expenses, $m
  1,264
  1,292
  1,320
  1,350
  1,379
  1,410
  1,441
  1,472
  1,505
  1,538
  1,572
  1,606
  1,641
  1,678
  1,714
  1,752
  1,791
  1,830
  1,870
  1,912
  1,954
  1,997
  2,041
  2,085
  2,131
  2,178
  2,226
  2,275
  2,325
  2,376
Total operating expenses, $m
  9,694
  14,280
  20,711
  29,455
  41,004
  55,860
  74,506
  97,390
  124,909
  157,389
  195,021
  238,116
  286,715
  340,859
  400,531
  465,672
  536,188
  611,964
  692,878
  778,811
  869,646
  965,292
  1,065,675
  1,170,749
  1,280,499
  1,394,940
  1,514,120
  1,638,117
  1,767,046
  1,901,049
Operating income, $m
  5,848
  9,733
  15,200
  22,651
  32,510
  45,205
  61,152
  80,737
  104,298
  132,118
  164,481
  201,409
  243,060
  289,469
  340,622
  396,468
  456,925
  521,897
  591,278
  664,964
  742,857
  824,878
  910,963
  1,001,074
  1,095,196
  1,193,343
  1,295,555
  1,401,901
  1,512,478
  1,627,409
EBITDA, $m
  6,157
  10,175
  15,828
  23,532
  33,725
  46,850
  63,338
  83,586
  107,945
  136,706
  170,095
  208,273
  251,334
  299,313
  352,197
  409,931
  472,434
  539,604
  611,332
  687,510
  768,039
  852,834
  941,831
  1,034,990
  1,132,296
  1,233,763
  1,339,432
  1,449,375
  1,563,692
  1,682,511
Interest expense (income), $m
  13
  108
  229
  406
  654
  992
  1,439
  2,014
  2,735
  3,621
  4,687
  5,945
  7,405
  9,074
  10,957
  13,055
  15,367
  17,891
  20,623
  23,559
  26,695
  30,025
  33,545
  37,251
  41,141
  45,213
  49,466
  53,901
  58,520
  63,325
  68,321
Earnings before tax, $m
  5,740
  9,503
  14,794
  21,997
  31,517
  43,766
  59,139
  78,002
  100,677
  127,431
  158,536
  194,004
  233,986
  278,512
  327,568
  381,101
  439,034
  501,274
  567,719
  638,269
  712,833
  791,333
  873,712
  959,933
  1,049,983
  1,143,877
  1,241,654
  1,343,382
  1,449,153
  1,559,088
Tax expense, $m
  1,550
  2,566
  3,994
  5,939
  8,510
  11,817
  15,967
  21,061
  27,183
  34,406
  42,805
  52,381
  63,176
  75,198
  88,443
  102,897
  118,539
  135,344
  153,284
  172,333
  192,465
  213,660
  235,902
  259,182
  283,495
  308,847
  335,247
  362,713
  391,271
  420,954
Net income, $m
  4,190
  6,937
  10,799
  16,058
  23,008
  31,949
  43,171
  56,941
  73,494
  93,024
  115,732
  141,623
  170,810
  203,314
  239,124
  278,204
  320,495
  365,930
  414,435
  465,936
  520,368
  577,673
  637,810
  700,751
  766,488
  835,030
  906,407
  980,669
  1,057,882
  1,138,134

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
Total assets, $m
  8,433
  13,029
  19,485
  28,272
  39,888
  54,837
  73,607
  96,651
  124,366
  157,084
  195,063
  238,483
  287,453
  342,012
  402,145
  467,792
  538,857
  615,226
  696,775
  783,382
  874,934
  971,335
  1,072,511
  1,178,417
  1,289,037
  1,404,386
  1,524,512
  1,649,495
  1,779,449
  1,914,519
Adjusted assets (=assets-cash), $m
  8,433
  13,029
  19,485
  28,272
  39,888
  54,837
  73,607
  96,651
  124,366
  157,084
  195,063
  238,483
  287,453
  342,012
  402,145
  467,792
  538,857
  615,226
  696,775
  783,382
  874,934
  971,335
  1,072,511
  1,178,417
  1,289,037
  1,404,386
  1,524,512
  1,649,495
  1,779,449
  1,914,519
Revenue / Adjusted assets
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
  1.843
Average production assets, $m
  1,772
  2,737
  4,094
  5,940
  8,381
  11,521
  15,465
  20,307
  26,130
  33,004
  40,983
  50,106
  60,394
  71,857
  84,492
  98,284
  113,215
  129,260
  146,394
  164,590
  183,825
  204,079
  225,337
  247,588
  270,829
  295,064
  320,303
  346,562
  373,866
  402,244
Working capital, $m
  1,616
  2,497
  3,735
  5,419
  7,645
  10,511
  14,108
  18,525
  23,837
  30,109
  37,388
  45,711
  55,097
  65,554
  77,080
  89,663
  103,284
  117,922
  133,552
  150,152
  167,700
  186,178
  205,570
  225,870
  247,072
  269,181
  292,206
  316,162
  341,070
  366,960
Total debt, $m
  4,249
  7,522
  12,119
  18,375
  26,645
  37,289
  50,653
  67,060
  86,794
  110,089
  137,130
  168,045
  202,911
  241,758
  284,572
  331,313
  381,911
  436,286
  494,349
  556,013
  621,198
  689,835
  761,873
  837,278
  916,040
  998,168
  1,083,697
  1,172,685
  1,265,212
  1,361,382
Total liabilities, $m
  6,004
  9,277
  13,874
  20,130
  28,400
  39,044
  52,408
  68,815
  88,549
  111,844
  138,885
  169,800
  204,666
  243,513
  286,327
  333,068
  383,666
  438,041
  496,104
  557,768
  622,953
  691,590
  763,628
  839,033
  917,795
  999,923
  1,085,452
  1,174,440
  1,266,967
  1,363,137
Total equity, $m
  2,429
  3,752
  5,612
  8,142
  11,488
  15,793
  21,199
  27,835
  35,817
  45,240
  56,178
  68,683
  82,786
  98,499
  115,818
  134,724
  155,191
  177,185
  200,671
  225,614
  251,981
  279,744
  308,883
  339,384
  371,243
  404,463
  439,059
  475,054
  512,481
  551,381
Total liabilities and equity, $m
  8,433
  13,029
  19,486
  28,272
  39,888
  54,837
  73,607
  96,650
  124,366
  157,084
  195,063
  238,483
  287,452
  342,012
  402,145
  467,792
  538,857
  615,226
  696,775
  783,382
  874,934
  971,334
  1,072,511
  1,178,417
  1,289,038
  1,404,386
  1,524,511
  1,649,494
  1,779,448
  1,914,518
Debt-to-equity ratio
  1.750
  2.000
  2.160
  2.260
  2.320
  2.360
  2.390
  2.410
  2.420
  2.430
  2.440
  2.450
  2.450
  2.450
  2.460
  2.460
  2.460
  2.460
  2.460
  2.460
  2.470
  2.470
  2.470
  2.470
  2.470
  2.470
  2.470
  2.470
  2.470
  2.470
Adjusted equity ratio
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4,190
  6,937
  10,799
  16,058
  23,008
  31,949
  43,171
  56,941
  73,494
  93,024
  115,732
  141,623
  170,810
  203,314
  239,124
  278,204
  320,495
  365,930
  414,435
  465,936
  520,368
  577,673
  637,810
  700,751
  766,488
  835,030
  906,407
  980,669
  1,057,882
  1,138,134
Depreciation, amort., depletion, $m
  310
  442
  628
  881
  1,215
  1,645
  2,185
  2,849
  3,646
  4,588
  5,614
  6,864
  8,273
  9,843
  11,574
  13,464
  15,509
  17,707
  20,054
  22,547
  25,182
  27,956
  30,868
  33,916
  37,100
  40,420
  43,877
  47,474
  51,214
  55,102
Funds from operations, $m
  4,500
  7,379
  11,427
  16,938
  24,223
  33,594
  45,357
  59,790
  77,141
  97,612
  121,346
  148,487
  179,083
  213,157
  250,699
  291,667
  336,004
  383,637
  434,489
  488,483
  545,549
  605,629
  668,678
  734,667
  803,588
  875,450
  950,284
  1,028,143
  1,109,096
  1,193,236
Change in working capital, $m
  606
  881
  1,237
  1,684
  2,226
  2,865
  3,598
  4,417
  5,312
  6,271
  7,279
  8,322
  9,386
  10,457
  11,526
  12,583
  13,621
  14,638
  15,631
  16,600
  17,548
  18,477
  19,393
  20,299
  21,203
  22,109
  23,025
  23,956
  24,909
  25,889
Cash from operations, $m
  3,894
  6,498
  10,190
  15,254
  21,996
  30,729
  41,759
  55,373
  71,828
  91,341
  114,066
  140,164
  169,697
  202,700
  239,173
  279,085
  322,383
  368,999
  418,858
  471,883
  528,001
  587,152
  649,285
  714,368
  782,385
  853,341
  927,260
  1,004,187
  1,084,188
  1,167,347
Maintenance CAPEX, $m
  -152
  -243
  -375
  -561
  -814
  -1,148
  -1,578
  -2,118
  -2,782
  -3,579
  -4,521
  -5,614
  -6,864
  -8,273
  -9,843
  -11,574
  -13,464
  -15,509
  -17,707
  -20,054
  -22,547
  -25,182
  -27,956
  -30,868
  -33,916
  -37,100
  -40,420
  -43,877
  -47,474
  -51,214
New CAPEX, $m
  -665
  -966
  -1,356
  -1,846
  -2,441
  -3,141
  -3,944
  -4,842
  -5,823
  -6,874
  -7,979
  -9,123
  -10,289
  -11,463
  -12,634
  -13,792
  -14,931
  -16,045
  -17,134
  -18,196
  -19,235
  -20,254
  -21,257
  -22,251
  -23,241
  -24,235
  -25,239
  -26,259
  -27,304
  -28,379
Cash from investing activities, $m
  -817
  -1,209
  -1,731
  -2,407
  -3,255
  -4,289
  -5,522
  -6,960
  -8,605
  -10,453
  -12,500
  -14,737
  -17,153
  -19,736
  -22,477
  -25,366
  -28,395
  -31,554
  -34,841
  -38,250
  -41,782
  -45,436
  -49,213
  -53,119
  -57,157
  -61,335
  -65,659
  -70,136
  -74,778
  -79,593
Free cash flow, $m
  3,077
  5,290
  8,458
  12,847
  18,742
  26,440
  36,237
  48,413
  63,224
  80,888
  101,566
  125,428
  152,544
  182,964
  216,695
  253,718
  293,988
  337,445
  384,017
  433,632
  486,220
  541,716
  600,072
  661,249
  725,227
  792,006
  861,601
  934,051
  1,009,410
  1,087,754
Issuance/(repayment) of debt, $m
  2,249
  3,272
  4,597
  6,256
  8,270
  10,644
  13,364
  16,407
  19,733
  23,295
  27,041
  30,915
  34,866
  38,846
  42,815
  46,740
  50,598
  54,375
  58,063
  61,664
  65,185
  68,637
  72,038
  75,405
  78,761
  82,128
  85,529
  88,988
  92,527
  96,170
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  2,249
  3,272
  4,597
  6,256
  8,270
  10,644
  13,364
  16,407
  19,733
  23,295
  27,041
  30,915
  34,866
  38,846
  42,815
  46,740
  50,598
  54,375
  58,063
  61,664
  65,185
  68,637
  72,038
  75,405
  78,761
  82,128
  85,529
  88,988
  92,527
  96,170
Total cash flow (excl. dividends), $m
  5,327
  8,562
  13,055
  19,103
  27,012
  37,084
  49,602
  64,820
  82,957
  104,183
  128,607
  156,343
  187,411
  221,810
  259,510
  300,458
  344,587
  391,820
  442,081
  495,297
  551,404
  610,354
  672,109
  736,654
  803,989
  874,134
  947,131
  1,023,039
  1,101,937
  1,183,924
Retained Cash Flow (-), $m
  -913
  -1,324
  -1,859
  -2,531
  -3,345
  -4,305
  -5,406
  -6,637
  -7,982
  -9,423
  -10,938
  -12,505
  -14,103
  -15,713
  -17,318
  -18,906
  -20,467
  -21,994
  -23,486
  -24,943
  -26,367
  -27,763
  -29,139
  -30,501
  -31,859
  -33,220
  -34,596
  -35,995
  -37,427
  -38,900
Prev. year cash balance distribution, $m
  5,955
  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
  10,369
  7,239
  11,196
  16,573
  23,667
  32,779
  44,196
  58,184
  74,975
  94,760
  117,669
  143,838
  173,307
  206,097
  242,192
  281,552
  324,120
  369,825
  418,594
  470,354
  525,038
  582,590
  642,971
  706,153
  772,130
  840,914
  912,535
  987,044
  1,064,510
  1,145,023
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
  9,941
  6,627
  9,743
  13,646
  18,345
  23,789
  29,858
  36,366
  43,069
  49,679
  55,879
  61,381
  65,895
  69,190
  71,103
  71,548
  70,523
  68,107
  64,452
  59,768
  54,306
  48,340
  42,141
  35,966
  30,037
  24,534
  19,586
  15,271
  11,620
  8,622
Current shareholders' claim on cash, %
  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 80.5
Price to Sales 19.4
Price to Book 23.3
Price to Tangible Book
Price to Cash Flow 80.2
Price to Free Cash Flow 89.6
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 0001 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 60% 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 $1237 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 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 11.4%.

Life of production assets of 7.3 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 10.4%. 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 607 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 $139.1 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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COMPANY NEWS

▶ NVIDIA Falls 3%   [Oct-19-18 03:04PM  Investing.com]
▶ Goldman Sachs Adds Nvidia To 'Conviction Buy' List   [Oct-18-18 05:53PM  Yahoo Finance Video]
▶ The Key Question Facing Nvidia Stock   [Oct-16-18 02:58PM  InvestorPlace]
▶ NVIDIA Rises 3%   [02:38PM  Investing.com]
▶ What Direction Will Nvidia Go From Here?   [09:31AM  TheStreet.com]
▶ Where Will NVIDIA Be in 5 Years?   [07:36AM  Motley Fool]
▶ Market Winners & Losers   [Oct-15-18 05:17PM  Yahoo Finance Video]
▶ Monday Madness: Is Nvidia a Hit or Miss?   [04:42PM  TheStreet.com]
▶ When Should You Buy Intel Stock?   [03:13PM  InvestorPlace]
▶ Should You Buy Micron Stock on the Dip?   [08:35AM  InvestorPlace]
▶ NVIDIA Keeps Boosting Its Bets on the Future   [Oct-14-18 01:41PM  Motley Fool]
▶ 5 AI Predictions Investors Need to Know   [10:34AM  Motley Fool]
▶ Jim Cramer Says 'Amazon's Never Been Cheap'   [Oct-13-18 03:08PM  TheStreet.com]
▶ Cathie Wood on Nvidia   [Oct-12-18 05:12PM  Yahoo Finance Video]
▶ Jim Cramer on Activision Blizzard and Nvidia   [01:18PM  TheStreet.com]
▶ AMD Has Made a Comeback   [12:48PM  InvestorPlace]
▶ Dont Buy AMD Stock Until This Happens   [10:51AM  InvestorPlace]
▶ Stocks Volatile In Early Trade; Square's Sell-Off Accelerates   [10:16AM  Investor's Business Daily]
▶ Technology ETF suffering biggest one-day drop in 7 years   [Oct-10-18 03:56PM  MarketWatch]
▶ Tech Stocks Sell Off; This Hot IPO Stock Breaks Support Level   [10:14AM  Investor's Business Daily]
▶ S&P 500 Rebounds, But These Top S&P 500 Stocks Break Support   [04:09PM  Investor's Business Daily]
▶ NVIDIA Falls 3.07%   [02:42PM  Investing.com]
▶ A Look at NVIDIA's Quadro Business   [08:00AM  Motley Fool]
▶ 5 Top Stock Trades for Monday Morning   [06:03AM  InvestorPlace]
▶ Stocks Pare Losses, Cap An Awful Week For Market, Leading Stocks   [Oct-05-18 04:20PM  Investor's Business Daily]
▶ NVIDIA Falls 3.21%   [03:18PM  Investing.com]
▶ Disney drops more details on its Star Wars land Millennium Falcon ride   [12:29PM  American City Business Journals]
▶ NVIDIA Falls 3.10%   [Oct-04-18 03:16PM  Investing.com]
▶ Nvidia Heats Up, Driving Call Prices Higher   [Oct-03-18 04:24PM  TheStreet.com]

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