NVIDIA Corp (NVDA, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $157.31, NVIDIA Corp has witnessed a daily loss of 0.28%, marked against a three-month change of 45.16%. A thorough analysis, underlined by the GF Score, suggests that NVIDIA Corp is well-positioned for substantial growth in the near future.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 9/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 8/10
- Momentum rank: 8/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in profitability and growth, and slightly lower ranks in GF Value and Momentum, GuruFocus assigned NVIDIA Corp the GF Score of 99 out of 100, which signals the highest outperformance potential.
Company Overview: NVIDIA Corp's Business Operations
NVIDIA Corp is a leading developer of graphics processing units (GPUs). Traditionally, GPUs were used to enhance the experience on computing platforms, most notably in gaming applications on PCs. GPU use cases have since emerged as important semiconductors used in artificial intelligence. NVIDIA not only offers AI GPUs, but also a software platform, Cuda, used for AI model development and training. NVIDIA is also expanding its data center networking solutions, helping to tie GPUs together to handle complex workloads. With a market cap of $3,836.4 billion and sales of $148.5 million, NVIDIA Corp boasts an operating margin of 58.03%.
Financial Strength: A Pillar of Stability
According to the Financial Strength rating, NVIDIA Corp's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for NVIDIA Corp stands impressively at 350.34, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5.
With an Altman Z-Score of 60.68, NVIDIA Corp exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.07, NVIDIA Corp's strategic handling of debt solidifies its financial health.
Profitability: A Testament to Operational Excellence
The Profitability Rank shows NVIDIA Corp's impressive standing among its peers in generating profit. NVIDIA Corp's Operating Margin has increased by 139.45% over the past five years, as shown by the following data: 2021: 27.18; 2022: 37.31; 2023: 20.68; 2024: 54.12; 2025: 62.42.
Furthermore, NVIDIA Corp's Gross Margin has seen a consistent rise over the past five years, as evidenced by the data: 2021: 62.34; 2022: 64.93; 2023: 56.93; 2024: 72.72; 2025: 74.99. This trend underscores the company's growing proficiency in transforming revenue into profit. NVIDIA Corp's strong Predictability Rank of 3.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth: A Commitment to Expansion
Ranked highly in Growth, NVIDIA Corp demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 70.5%, which outperforms better than 97.62% of 968 companies in the Semiconductors industry.
Moreover, NVIDIA Corp has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 97.9, and the rate over the past five years is 82.3. This trend accentuates the company's continued capability to drive growth.
Conclusion: NVIDIA Corp's Path to Market Leadership
In conclusion, NVIDIA Corp's financial strength, profitability, and growth metrics, as highlighted by the GF Score, underscore the firm's unparalleled position for potential outperformance. With a strong balance sheet, impressive profitability, and a commitment to growth, NVIDIA Corp is well-positioned to continue its trajectory of success. For investors seeking companies with strong GF Scores, GuruFocus Premium members can find more opportunities using the following screener link: 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.
