Thread by @mktbarometrix

1 | $NVDA is breaking out in a major way this morning after strong earnings and forward guidance last week. . .

Let's take a closer look at the Q2 results

[THREAD]

2| GROWTH -

$NVDA EPS blasted higher, up 280% Y/Y

Revenue, EBITDA, Net Income and Free Cash Flow (FCF) all continued higher as well - although the acceleration of the push higher in revenue began to slow (-18%) after lapping the easiest Y/Y comparisons to the 2020 COVID lows

3 | PROFITABILITY - for $NVDA also improved and outperformed industry peers:

Gross Profit Margin: 0.64 vs industry 0.50
EBITDA Margin: 0.39 vs industry 0.20
Net Income Margin: 0.32 vs industry 0.08

4 | SOLVENCY -

$NVDA has more debt ($12.6B) than cash ($5.63B) sitting on the balance sheet, but a healthy current ratio of 5.8 + superior earnings mean they will have no problem servicing their debt obligations.

5 | VALUATION -

EV/EBITDA: 41.01 vs ind 11.50
P/E: 50.86 vs ind 17.10
P/B: 14.69 vs ind 2.90
P/S: 13.21 vs ind 3.20

$NVDA is far more expensive than industry peers, but with superior earnings & profitability it would seem they have earned their hefty valuation

6 | #Semiconductors INDUSTRY TAILWINDS:

1. Global chip shortage boosting profitability
2. Secular semiconductor megatrend still intact as technology trends lift demand
3. Remote work trend another tailwind for demand

7 | It's easy to see what the market sees in $NVDA

- Accelerating growth
- Superior Profitability
- Healthy financial condition
- Industry tailwinds

8 | Sky high valuations are commonplace in a market as wild as this one. Don't let that stop you from seizing opportunities as they rise.

Solid underlying company performance + earnings beat + price break out = damn fine opportunity

*not investment advice*

9 | For access to all the tools and training you need to perform this type of analysis:

marketbarometrix.com