NVDA NVIDIA

Nvidia designs graphics processing units (GPUs) and system-on-chip products used in gaming, data center AI compute, robotics, and automotive applications. Sector: Technology.

NVIDIA (NVDA) is an individual stock. The analysis below presents key financial metrics for the company, covering profitability, capital efficiency, valuation, margins, and growth.

Assessing the quality of returns on invested capital, ROIC is 138.21%, WACC is 17.72%, and the economic spread is 120.49%. On balance, the company generate returns on capital that dramatically exceed their funding costs — a rare and powerful compounding dynamic. Supporting metrics show ROE at 106.39% and ROA at 65.86%, a combination that helps frame whether profitability strength is broad enough to hold through different market conditions. Taken together, the return profile suggests a company with credible compounding capacity if current operating execution persists.

The current pricing of the company reads trailing P/E of 36.20, forward P/E of 21.43, PEG of 0.47. A meaningful compression from trailing to forward P/E implies analysts are projecting earnings growth that could re-rate the company favorably if delivered. The PEG ratio is low enough to suggest the valuation is supported by earnings growth expectations rather than multiple expansion alone. At 3.91, the aggregate current ratio reflects strong balance sheet liquidity across the company. In aggregate, the valuation reads as fair to moderately stretched — leaving the investment case dependent on earnings execution rather than multiple expansion.

Looking at margins from gross to free cash flow, gross margin sits at 71.07%, operating margin at 60.38%, and free cash flow margin at 44.77%. The gross margin here is a standout, pointing to businesses with durable unit economics and limited commodity exposure. Exceptional operating margins signal that overhead costs are well managed relative to the revenue base. Outstanding free cash flow margins signal businesses that convert revenues into cash at rates that support both reinvestment and shareholder returns. The aggregate margin picture is strong enough to suggest resilience through normal cyclical pressure.

Projected 12-month EPS growth of 68.9% adds a powerful forward signal — analyst consensus expects earnings to accelerate materially, which, if delivered, could make current multiples look increasingly modest. Zooming out from the valuation discussion, TTM revenue growth of 73.21% pointing to sustained and broad-based revenue growth within the company, while the estimated 12-month price change of 51.97%, where analyst targets indicate a strong re-rating opportunity from current prices. Anchoring to reported revenues provides discipline; analyst price targets add context about how the market currently values that operating reality. The path to realizing analyst-implied returns runs through revenue execution, margin stability, and a macro environment that doesn't undermine either. The estimated 12-month price change is based on analyst consensus price target estimates, sourced from publicly available data, and should not be interpreted as a reliable prediction of future performance.

The quantitative profile, taken as a whole, is above average on virtually every dimension that matters for long-term return generation.

This summary is based on publicly available quantitative data and is not intended as investment advice. Carefully consider your personal financial circumstances before making any decisions.