NVIDIA Corporation's products and services are visual computing platforms that address four markets: Gaming, Enterprise, High Performance Computing & Cloud, and Automotive. The Company operates in two segments: Graphics Processing Unit and Tegra Processor. The company was founded in 1993 and is based in Santa Clara, California.
NVDA Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Nvidia Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Nvidia Corp ranked in the 47th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 23%. In terms of the factors that were most noteworthy in this DCF analysis for NVDA, they are:
As a business, NVDA is generating more cash flow than 92.75% of positive cash flow stocks in the Technology.
The business' balance sheet reveals debt to be 2% of the company's capital (with equity being the remaining amount). Approximately merely 6.95% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
NVDA's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 59.96% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as NVDA, try MEI, TEAM, EXLS, HUBS, and NVT.