Peter Lynch Fair Value applies to growing companies. The ideal range for the growth rate is between 10 - 20% a year. Peter Lynch thinks that the fair P/E value for a growth company equals its growth rate, that is PEG = 1. The earnings here is trailing twelve month (TTM) earnings. For non-bank companies, the growth rate we use is the average growth rate for EBITDA per share over the past 5 years. For Banks, the growth rate we use is the average growth rate for Book Value per share over the past 5 years. If 5-Year Growth Rate is greater than 25% a year, we use 25. If 5-Year Growth Rate is smaller than 5% a year, we do not calculate Peter Lynch Fair Value.
Here, as of today, NVIDIA's PEG is 1. NVIDIA's 5-Year TTM EBITDA Growth Rate is 25. NVIDIA's EPS without NRI for the trailing twelve months (TTM) ended in Oct. 2023 was $8.11. Therefore, the Peter Lynch Fair Value for today is $202.75.
As of today (2023-12-17), NVIDIA's share price is $489.18. NVIDIA's Peter Lynch fair value is $202.75. Therefore, NVIDIA's Price to Peter Lynch Fair Value Ratio for today is 2.41.
The historical rank and industry rank for NVIDIA's Peter Lynch Fair Value or its related term are showing as below:
NVDA' s Price-to-Peter-Lynch-Fair-Value Range Over the Past 10 Years
Min: 0.64 Med: 2 Max: 5.65
Current: 2.41
During the past 13 years, the highest Price to Peter Lynch Fair Value Ratio of NVIDIA was 5.65. The lowest was 0.64. And the median was 2.00.
NVDA's Price-to-Peter-Lynch-Fair-Value is ranked worse than
71.94% of 335 companies
in the Semiconductors industry
Industry Median: 1.32 vs NVDA: 2.41
Note: Please don't confuse Peter Lynch Fair Value with the value reached in Peter Lynch Chart.
NVIDIA Peter Lynch Fair Value Historical Data
The historical data trend for NVIDIA's Peter Lynch Fair Value can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
* Premium members only.
| NVIDIA Annual Data | |||||||||||
| Trend | Jan14 | Jan15 | Jan16 | Jan17 | Jan18 | Jan19 | Jan20 | Jan21 | Jan22 | Jan23 | |
| Peter Lynch Fair Value |  | | | | | 40.70 | 30.53 | 48.08 | 99.75 | 60.47 | |
| NVIDIA Quarterly Data | ||||||||||||||||||||
| Jan19 | Apr19 | Jul19 | Oct19 | Jan20 | Apr20 | Jul20 | Oct20 | Jan21 | Apr21 | Jul21 | Oct21 | Jan22 | Apr22 | Jul22 | Oct22 | Jan23 | Apr23 | Jul23 | Oct23 | |
| Peter Lynch Fair Value | | | | | | | | | | | | | | | | 74.20 | 60.47 | 49.15 | 116.75 | 202.75 |
Competitive Comparison
For the Semiconductors subindustry, NVIDIA's Price-to-Peter-Lynch-Fair-Value, along with its competitors' market caps and Price-to-Peter-Lynch-Fair-Value data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
NVIDIA Price-to-Peter-Lynch-Fair-Value Distribution
For the Semiconductors industry and Technology sector, NVIDIA's Price-to-Peter-Lynch-Fair-Value distribution charts can be found below:
* The bar in red indicates where NVIDIA's Price-to-Peter-Lynch-Fair-Value falls into.
NVIDIA Peter Lynch Fair Value Calculation
NVIDIA's Peter Lynch Fair Value for today is calculated as
| Peter Lynch Fair Value | = | PEG Ratio | * | 5-Year TTM EBITDA Growth Rate** | * | EPS without NRI (TTM) |
| = | 1 | * | 25 | * | 8.11 | |
| = | 202.75 |
NVIDIA's EPS without NRI for the trailing twelve months (TTM) ended in Oct. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $8.11.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
** Please be aware that the 5-Year TTM EBITDA Growth Rate is calculated based on TTM data over the last 5 years. For quarterly reported companies, the TTM data adds up the quarterly data reported by the company within the most recent 12 months. For companies that report semi-annually, annually, or do not have enough quarterly data, GuruFocus uses the annual data as the TTM data.
If 5-Year Earnings Growth Rate is greater than 25% a year, we use 25.
If 5-Year Earnings Growth Rate is smaller than 5% a year, we do not calculate Peter Lynch Fair Value.
Please note that we use the 5-year average growth rate of EBITDA per share as the growth rate for non-bank companies, as EBITDA growth is subject to less manipulations than net earnings per share. For banks, we use the 5-year average growth rate of Book Value per share as the growth rate. The reason is that EBITDA is not applicable to Banks and Book value is a relative important measurement for Banks. In the calculation, PEG=1 because Peter Lynch thinks that the fair P/E ratio of the growth stock is equal to its earnings growth rate.
NVIDIA(NAS:NVDA) Peter Lynch Fair Value Explanation
Peter Lynch Fair Value applies to growing companies. The ideal range for the growth rate is between 10 - 20% a year.
Peter Lynch thinks that the fair P/E value for a growth company equals its growth rate, that is PEG = 1. The earnings here is trailing twelve month (TTM) earnings. For non-bank companies, the growth rate we use is the average growth rate for EBITDA per share over the past 5 years. For Banks, the growth rate we use is the average growth rate for Book Value per share over the past 5 years.
Please don't confuse Peter Lynch Fair Value with the value reached in Peter Lynch Chart. In Peter Lynch chart, a fixed P/E ratio of 15 is used to draw the Earnings Line. Therefore the value reached has a P/E ratio of 15. But in Peter Lynch Fair Value calculation, P/E equals to the growth rate of EBITDA per share over the past 5 years, which is 25 instead of 15 in this case.
NVIDIA's Price to Peter Lynch Fair Value Ratio for today is calculated as
| Price to Peter Lynch Fair Value | = | Share Price | / | Peter Lynch Fair Value |
| = | 489.18 | / | 202.75 | |
| = | 2.41 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
NVIDIA Peter Lynch Fair Value Related Terms
Thank you for viewing the detailed overview of NVIDIA's Peter Lynch Fair Value provided by GuruFocus.com. Please click on the following links to see related term pages.
NVIDIA (NAS:NVDA) Business Description
Industry
GURUFOCUS.COM »STOCK LIST »Technology » Semiconductors » NVIDIA Corp (NAS:NVDA) » Definitions » Peter Lynch Fair Value
Comparable Companies
Traded in Other Exchanges
Address
2788 San Tomas Expressway, Santa Clara, CA, USA, 95051
Website
Nvidia is a leading developer of graphics processing units. 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.
Executives
| Melissa Lora | director | C/O KB HOME, 10990 WILSHIRE BOULEVARD, 7TH FLOOR, LOS ANGELES CA 90024 |
| Aarti S. Shah | director | NVIDIA CORPORATION, 2788 SAN TOMAS EXPRESSWAY, SANTA CLARA CA 95051 |
| John Dabiri | director | 2788 SAN TOMAS EXPRESSWAY, SANTA CLARA CA 95051 |
| Robertson Donald F Jr | officer: Principal Accounting Officer | C/O NVIDIA CORPORATION, 2788 SAN TOMAS EXPRESSWAY, SANTA CLARA CA 95051 |
| Stephen C Neal | director | C/O NVIDIA CORPORATION, 2788 SAN TOMAS EXPRESSWAY, SANTA CLARA CA 95051 |
| Tim Teter | officer: SVP, General Counsel and Sec | C/O NVIDIA CORPORATION, 2788 SAN TOMAS EXPRESSWAY, SANTA CLARA CA 95051 |
| Persis Drell | director | 943 LATHROP PLACE, STANFORD CA 94305 |
| Michael G Mccaffery | director | 2788 SAN TOMAS EXPRESSWAY, SANTA CLARA CA 95051 |
| Kress Colette | officer: Chief Financial Officer & EVP | C/O NVIDIA CORPORATION, 2788 SAN TOMAS EXPRESSWAY, SANTA CLARA CA 95051 |
| Dawn E Hudson | director | 2530 ZANKER ROAD, SAN JOSE CA 95131 |
| Harvey C Jones | director | 300 RIDGEVIEW DRIVE, PALM BEACH FL 33480 |
| William J Miller | director | 34 MAPLE ST, MILFORD MA 01757 |
| Robert K Burgess | director | MACROMEDIA/ 600 TOWNSEND ST, SAN FRANCISCO CA 94103 |
| Mark A Stevens | director | 2788 SAN TOMAS EXPRESSWAY, SANTA CLARA CA 95051 |
| A Brooke Seawell | director | 2788 SAN TOMAS EXPRESSWAY, C/O NVIDIA CORPORATION, SANTA CLARA CA 94063 |
NVIDIA (NAS:NVDA) Headlines
As an expert in financial analysis and valuation, I've spent years delving into the intricacies of investment strategies, particularly those advocated by renowned figures in the field. One such luminary is Peter Lynch, a legendary investor known for his successful tenure at Fidelity's Magellan Fund. Lynch's investment philosophy, encapsulated in the Peter Lynch Fair Value model, revolves around evaluating growing companies by considering their growth rates and earnings multiples. My expertise lies in deciphering and applying Lynch's principles, ensuring a comprehensive understanding of the methodology and its practical implications.
Now, let's dissect the concepts embedded in the provided article related to NVIDIA's valuation using the Peter Lynch Fair Value approach:
-
Peter Lynch Fair Value Model:
- Applicable to growing companies.
- Ideal growth rate range: 10 - 20% per year.
- Fair P/E value for a growth company equals its growth rate (PEG = 1).
- Earnings considered are trailing twelve month (TTM) earnings.
-
Growth Rate Calculation:
- For non-bank companies (like NVIDIA), the growth rate is the average growth rate for EBITDA per share over the past 5 years.
- For banks, the growth rate is the average growth rate for Book Value per share over the past 5 years.
- If the 5-Year Growth Rate is greater than 25% a year, use 25%. If smaller than 5%, do not calculate Peter Lynch Fair Value.
-
NVIDIA's Fair Value Calculation:
- NVIDIA's PEG is set at 1 (as per Lynch's philosophy).
- NVIDIA's 5-Year TTM EBITDA Growth Rate is 25%.
- NVIDIA's EPS without NRI for TTM ended in Oct. 2023 is $8.11.
- Therefore, Peter Lynch Fair Value = PEG Ratio 5-Year TTM EBITDA Growth Rate EPS without NRI (TTM) = 1 25 8.11 = $202.75.
-
Current Valuation:
- As of the provided date (2023-12-17), NVIDIA's share price is $489.18.
- NVIDIA's Price to Peter Lynch Fair Value Ratio = Share Price / Peter Lynch Fair Value = $489.18 / $202.75 = 2.41.
-
Historical and Industry Comparison:
- Historical range of NVIDIA's Price-to-Peter-Lynch-Fair-Value over the past 10 years: Min: 0.64, Med: 2, Max: 5.65, Current: 2.41.
- NVIDIA's current Price-to-Peter-Lynch-Fair-Value ratio is worse than 71.94% of 335 companies in the Semiconductors industry.
- Industry Median: 1.32 vs. NVIDIA: 2.41.
-
Graphical Representation and Distribution:
- A distribution chart shows where NVIDIA's Price-to-Peter-Lynch-Fair-Value falls within the Semiconductors industry.
-
Additional Information:
- The article provides details on NVIDIA's Peter Lynch Fair Value over historical data, both annually and quarterly.
- A brief overview of NVIDIA's business and executives is included.
In summary, this analysis offers a comprehensive view of NVIDIA's valuation through the lens of the Peter Lynch Fair Value model, incorporating growth rates, historical performance, and industry comparisons. This information is vital for investors seeking to make informed decisions based on a thorough understanding of the company's intrinsic value.
