In today’s rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Intel (NASDAQ:INTC) alongside its primary competitors in the Semiconductors & Semiconductor Equipment industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to investors and shed light on company’s performance within the industry.
Intel Background
Intel is a leading digital chipmaker, focused on the design and manufacturing of microprocessors for the global personal computer and data center markets. Intel pioneered the x86 architecture for microprocessors and led the semiconductor industry down the path of Moore’s law for advances in semiconductor manufacturing. Intel remains the market share leader in central processing units in both the PC and server end markets. Intel is seeking to reinvigorate its chip manufacturing business, Intel Foundry, while developing leading-edge products within its Intel Products business segment.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Intel Corp | 788.17 | 2.12 | 3.90 | 3.98% | $7.85 | $5.22 | 2.78% |
| NVIDIA Corp | 45.99 | 37.98 | 24.41 | 29.14% | $38.75 | $41.85 | 62.49% |
| Taiwan Semiconductor Manufacturing Co Ltd | 34.53 | 10.86 | 14.95 | 9.44% | $691.11 | $588.54 | 30.31% |
| Broadcom Inc | 74.34 | 20.68 | 26.94 | 11.02% | $9.86 | $12.25 | 28.18% |
| Micron Technology Inc | 32.14 | 6.47 | 9.02 | 9.28% | $8.35 | $7.65 | 56.65% |
| Advanced Micro Devices Inc | 115.69 | 5.92 | 11.26 | 2.06% | $2.11 | $4.78 | 35.59% |
| Qualcomm Inc | 32.99 | 8.35 | 4.12 | -12.88% | $3.51 | $6.24 | 10.03% |
| Texas Instruments Inc | 34.34 | 10.30 | 9.99 | 8.21% | $2.24 | $2.72 | 14.24% |
| Analog Devices Inc | 64.96 | 4.29 | 13.35 | 2.32% | $1.47 | $1.94 | 25.91% |
| ARM Holdings PLC | 138.26 | 15.45 | 26.06 | 3.3% | $0.22 | $1.11 | 34.48% |
| Marvell Technology Inc | 29.24 | 5.01 | 9.26 | 13.84% | $2.58 | $1.07 | 36.83% |
| NXP Semiconductors NV | 29.55 | 5.99 | 5.06 | 6.43% | $1.11 | $1.79 | -2.37% |
| Monolithic Power Systems Inc | 25.23 | 13.20 | 17.79 | 5.12% | $0.21 | $0.41 | 18.88% |
| ASE Technology Holding Co Ltd | 38.12 | 4.07 | 2.07 | 3.56% | $32.4 | $28.88 | 5.29% |
| Credo Technology Group Holding Ltd | 139.12 | 22.67 | 38.72 | 7.99% | $0.09 | $0.18 | 272.08% |
| First Solar Inc | 18.52 | 2.87 | 5.14 | 5.19% | $0.61 | $0.61 | 79.67% |
| STMicroelectronics NV | 49.02 | 1.41 | 2.24 | 1.33% | $0.31 | $1.06 | -1.97% |
| ON Semiconductor Corp | 81.38 | 3.02 | 4.01 | 3.22% | $0.44 | $0.59 | -11.98% |
| United Microelectronics Corp | 16.19 | 1.91 | 2.87 | 4.29% | $30.07 | $17.62 | -2.25% |
| Tower Semiconductor Ltd | 72.13 | 4.93 | 9.34 | 1.9% | $0.13 | $0.09 | 6.79% |
| Lattice Semiconductor Corp | 431.50 | 16.71 | 24.09 | 0.4% | $0.01 | $0.09 | 4.92% |
| Rambus Inc | 45.47 | 7.98 | 15.31 | 3.84% | $0.08 | $0.14 | 22.68% |
| Average | 73.75 | 10.0 | 13.14 | 5.67% | $39.32 | $34.27 | 34.59% |
By thoroughly analyzing Intel, we can discern the following trends:
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At 788.17, the stock’s Price to Earnings ratio significantly exceeds the industry average by 10.69x, suggesting a premium valuation relative to industry peers.
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The current Price to Book ratio of 2.12, which is 0.21x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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With a relatively low Price to Sales ratio of 3.9, which is 0.3x the industry average, the stock might be considered undervalued based on sales performance.
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With a Return on Equity (ROE) of 3.98% that is 1.69% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
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Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $7.85 Billion, which is 0.2x below the industry average, potentially indicating lower profitability or financial challenges.
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Compared to its industry, the company has lower gross profit of $5.22 Billion, which indicates 0.15x below the industry average, potentially indicating lower revenue after accounting for production costs.
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The company’s revenue growth of 2.78% is significantly lower compared to the industry average of 34.59%. This indicates a potential fall in the company’s sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company’s financial health and risk profile, aiding in informed decision-making.
When evaluating Intel alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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In terms of the debt-to-equity ratio, Intel has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.44.
Key Takeaways
For Intel, the PE ratio is high compared to its peers in the Semiconductors & Semiconductor Equipment industry, indicating potential overvaluation. The PB and PS ratios are low, suggesting that the stock may be undervalued based on these metrics. However, the low ROE, EBITDA, gross profit, and revenue growth indicate weaker financial performance relative to industry competitors. Intel may need to improve these fundamental metrics to enhance its overall valuation position within the sector.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
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