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Wall Street JournalComparative Study: Intel And Industry Competitors In Semiconductors & Semiconductor Equipment Industry
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 | 621.67 | 1.67 | 3.07 | 3.98% | $7.85 | $5.22 | 2.78% |
| NVIDIA Corp | 46.42 | 38.34 | 24.64 | 29.14% | $38.75 | $41.85 | 62.49% |
| Broadcom Inc | 73.34 | 20.40 | 26.58 | 11.02% | $9.86 | $12.25 | 28.18% |
| Taiwan Semiconductor Manufacturing Co Ltd | 31.04 | 9.76 | 13.44 | 9.44% | $691.11 | $588.54 | 30.31% |
| Advanced Micro Devices Inc | 112.74 | 5.77 | 10.98 | 2.06% | $2.11 | $4.78 | 35.59% |
| Micron Technology Inc | 27.82 | 5.60 | 7.81 | 9.28% | $8.35 | $7.65 | 56.65% |
| Qualcomm Inc | 34.66 | 8.77 | 4.33 | -12.88% | $3.51 | $6.24 | 10.03% |
| Texas Instruments Inc | 31.95 | 9.59 | 9.30 | 8.21% | $2.24 | $2.72 | 14.24% |
| Analog Devices Inc | 60.27 | 3.98 | 12.39 | 2.32% | $1.47 | $1.94 | 25.91% |
| ARM Holdings PLC | 142.13 | 15.88 | 26.79 | 3.3% | $0.22 | $1.11 | 34.48% |
| Marvell Technology Inc | 30.55 | 5.23 | 9.67 | 13.84% | $2.58 | $1.07 | 36.83% |
| NXP Semiconductors NV | 27.19 | 5.51 | 4.65 | 6.43% | $1.11 | $1.79 | -2.37% |
| Monolithic Power Systems Inc | 23.70 | 12.41 | 16.72 | 5.12% | $0.21 | $0.41 | 18.88% |
| ASE Technology Holding Co Ltd | 32.48 | 3.46 | 1.76 | 3.56% | $32.4 | $28.88 | 5.29% |
| First Solar Inc | 20.28 | 3.15 | 5.63 | 5.19% | $0.61 | $0.61 | 79.67% |
| Credo Technology Group Holding Ltd | 124.93 | 20.35 | 34.77 | 7.99% | $0.09 | $0.18 | 272.08% |
| STMicroelectronics NV | 44.93 | 1.30 | 2.06 | 1.33% | $0.31 | $1.06 | -1.97% |
| ON Semiconductor Corp | 74.30 | 2.76 | 3.66 | 3.22% | $0.44 | $0.59 | -11.98% |
| United Microelectronics Corp | 14.79 | 1.74 | 2.62 | 4.29% | $30.07 | $17.62 | -2.25% |
| Tower Semiconductor Ltd | 69.75 | 4.75 | 9.03 | 1.9% | $0.13 | $0.09 | 6.79% |
| Lattice Semiconductor Corp | 372.90 | 14.44 | 20.82 | 0.4% | $0.01 | $0.09 | 4.92% |
| Rambus Inc | 45.09 | 7.91 | 15.18 | 3.84% | $0.08 | $0.14 | 22.68% |
| Average | 68.63 | 9.58 | 12.52 | 5.67% | $39.32 | $34.27 | 34.59% |
Upon a comprehensive analysis of Intel, the following trends can be discerned:
At 621.67, the stock's Price to Earnings ratio significantly exceeds the industry average by 9.06x, suggesting a premium valuation relative to industry peers.
Considering a Price to Book ratio of 1.67, which is well below the industry average by 0.17x, the stock may be undervalued based on its book value compared to its peers.
Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 3.07, which is 0.25x the industry average.
The company has a lower Return on Equity (ROE) of 3.98%, which is 1.69% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $7.85 Billion is 0.2x below the industry average, suggesting potential lower profitability or financial challenges.
The gross profit of $5.22 Billion is 0.15x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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 provides insights into the proportion of debt a company has in relation to its equity and asset value.
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:
Intel has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.44.
This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.
Key Takeaways
For Intel in the Semiconductors & Semiconductor Equipment industry, the PE ratio is high compared to peers, indicating potential overvaluation. The PB and PS ratios are low, suggesting undervaluation relative to industry competitors. In terms of ROE, EBITDA, gross profit, and revenue growth, Intel lags behind its peers, signaling weaker financial performance and growth prospects within the sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.