NVIDIA Corp. (NVDA) Stock Analysis

Impressive Financial Performance


NVIDIA Corporation (NASDAQ: NVDA) has demonstrated remarkable financial performance in the fourth quarter and the fiscal year 2024, showing significant year-over-year growth. With record quarterly revenues of $22.1 billion, which is a 265% increase from the previous year, and a substantial 126% increase in annual revenue totaling $60.9 billion, NVIDIA’s financial strength is evident. These figures indicate NVIDIA’s strong market position and its successful scaling of operations.

From a profitability standpoint, NVIDIA’s record quarterly Data Center revenue, which is a key driver of their business, was $18.4 billion, showing a 409% increase from the previous year. This specific sector’s growth is a testament to the company’s successful strategic focus and innovation in high-demand areas like AI and data processing.


The company’s GAAP earnings per diluted share for the quarter was $4.93, up by 765% from the previous year, which is a strong indicator of NVIDIA’s earning power. Similarly, the full-year GAAP earnings per diluted share saw an impressive increase of 586% to $11.93. Non-GAAP earnings, often considered by value investors to understand core operational performance, were also robust with quarterly earnings per share of $5.16 and annual earnings per share of $12.96. These non-GAAP figures were up 486% and 288% respectively from the previous year, reflecting strong operational efficiency and profitability.


Analyzing the balance sheet information, NVIDIA ended the period with cash, cash equivalents, and marketable securities of $25.984 billion. This significant cash position gives NVIDIA the flexibility to pursue further growth opportunities, research and development, and shareholder returns. The shareholder returns are also highlighted by NVIDIA’s commitment to paying a quarterly cash dividend, which, although modest at $0.04 per share, signifies a return on investment for shareholders.

NVIDIA’s gross margin stood at 76.0% for the quarter, up from 63.3% a year ago, and the annual gross margin improved to 72.7% from 56.9% the previous year. These figures show NVIDIA’s ability to maintain profitability despite its rapid growth.

Looking ahead, NVIDIA expects revenue for the first quarter of fiscal 2025 to be around $24.0 billion, with both GAAP and non-GAAP gross margins forecasted at approximately 76.3% and 77.0%, respectively. This outlook suggests that NVIDIA’s management is confident in the company’s continued growth trajectory.


Market Capitalization and Valuation Metrics


With a market capitalization of $2.06 trillion, NVIDIA commands a significant presence in the market. The price-to-earnings (PE) ratio is currently 71.45, indicating a premium market valuation, which is not uncommon for companies with NVIDIA’s growth trajectory. The forward PE ratio of 37.5 suggests that analysts expect earnings to continue to increase, potentially justifying the current stock price.  

Financial Ratios and Efficiency


NVIDIA’s financial efficiency ratios tell a story of a company that is not only growing but also managing its assets effectively. With a return on equity (ROE) of 92.80% and a return on invested capital (ROIC) of 53.93%, NVIDIA is generating significant returns for its shareholders. The company’s asset turnover of 1.14 and inventory turnover of 3.18 underscore efficient operations.


Liquidity and Capital Structure


The company maintains a healthy liquidity position, with a current ratio of 4.17 and a quick ratio of 3.38. Its debt-to-equity ratio stands at 0.25, indicating a conservative capital structure that is not overly reliant on leverage. This conservative approach to leverage is crucial for value investors looking for companies with a lower risk profile.


Dividends and Shareholder Returns


While NVIDIA’s dividend yield is a modest 0.02%, the company’s share buyback yield of 0.52% adds to the total shareholder yield, providing an additional avenue for investor returns. The combined shareholder yield stands at 0.54%, which may not be the primary draw for dividend-focused investors but reflects the company’s policy of returning value to shareholders.


Growth Prospects and Analyst Outlook


NVIDIA’s revenue growth forecast for the next five years stands at 21.11%, with an EPS growth forecast of 23.92%. These projections, along with a strong consensus rating of “Strong Buy” from analysts, signal confidence in NVIDIA’s future performance.




NVIDIA appears to be a company with strong fundamentals and impressive financial performance. Its market-leading position in accelerated computing and AI, coupled with solid financial ratios, underpins its value proposition. While the current valuation metrics suggest a premium, they may be justified by the company’s growth prospects and efficiency. For value investors, NVIDIA’s financial health, growth trajectory, and innovation in high-demand sectors may outweigh the concerns over its high PE ratio, making it a potentially attractive investment for those with a long-term horizon.




This analysis is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult with a financial advisor before making investment decisions.

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