NVIDIA Corp (NVDA, Financial) has recently captured the attention of investors and financial analysts with its strong financial performance. Despite a daily loss of 2.02% and a three-month decline of 11.17%, the company's shares, priced at $116.69, are backed by a promising outlook. A detailed analysis using the GF Score indicates that NVIDIA Corp is poised for significant growth in the foreseeable future.
What Is the GF Score?
The GF Score is a proprietary stock performance ranking system developed by GuruFocus. It evaluates stocks based on five key aspects: financial strength, profitability, growth, GF Value, and momentum, which have been proven to correlate with long-term stock performance from 2006 to 2021. A higher GF Score typically indicates a higher potential for returns. NVIDIA Corp has been awarded a GF Score of 97 out of 100, signaling strong potential for market outperformance.
- Financial strength rank: 9/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 6/10
- Momentum rank: 6/10
Understanding NVIDIA Corp's Business
NVIDIA Corp, with a market cap of $2.86 billion and annual sales of $96.31 million, is a leading developer of graphics processing units (GPUs). Initially focused on enhancing PC gaming experiences, NVIDIA's GPUs now play a crucial role in artificial intelligence applications. The company offers both AI GPUs and a software platform, Cuda, for AI model development and training. Additionally, NVIDIA is expanding into data center networking solutions to support complex workloads.
Financial Strength Breakdown
NVIDIA Corp's financial robustness is evident in its impressive Interest Coverage ratio of 237.38, significantly surpassing the benchmark set by investment guru Benjamin Graham. The company's Altman Z-Score of 69.66 further underscores its financial stability, indicating a strong defense against financial distress. A low Debt-to-Revenue ratio of 0.1 highlights NVIDIA's strategic debt management.
Profitability Rank Breakdown
NVIDIA Corp's profitability is impressive, with an Operating Margin that has significantly increased over the past five years, reaching 54.12% in 2024. The company's Gross Margin also reflects a consistent upward trend, peaking at 72.72% in 2024. These metrics demonstrate NVIDIA's growing efficiency in converting revenue into profit, supported by a strong Piotroski F-Score and a Predictability Rank of 4.5 stars.
Growth Rank Breakdown
NVIDIA Corp is recognized for its commitment to growth, with a Growth Rank of 10/10. The company's 3-Year Revenue Growth Rate of 54.4% is exceptionally high, outperforming 94.62% of its industry peers. This is complemented by a strong increase in EBITDA, highlighting NVIDIA's ongoing ability to expand and innovate.
Conclusion
Considering NVIDIA Corp's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score effectively highlights the company's strong position for potential market outperformance. Investors looking for similar opportunities can explore more companies with high GF Scores through the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
