NVIDIA Corporation : equity valuation report

• Autor(a) principal: Silva, Diogo José Gonzaga Cosme da
• Data de Publicação: 2022
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.14/40880
• topic: Semiconductors; Intrinsic and relative valuation; Equity Research; NVIDIA Corporation; Semicondutores; Avaliação intrínseca e relativa; Avaliação de empresas; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

The main objective of this dissertation is to determine what the fair price of an NVIDIA Corporation share will be on January 29, 2023. After reviewing several articles on the different techniques for valuing a company’s equity, the Discounted Cash Flow method based on the WACC discount rate was deemed the most appropriate method for the objective of this dissertation. In a complementary way, the results of the chosen method were compared with those of a relative valuation method. The application of the first method resulted in a fair price of $252.57, which is 10.58% above the closing price on January 30, 2022, and as a result a BUY recommendation was presented to investors. The results of the second method proved inconclusive, showing that the company on that same day was trading at a discount in the case of the P/E multiple and at a premium in the case of the EV/EBITDA multiple. The application of both methods was supported by a comprehensive analysis of the semiconductor industry, NVIDIA’s historical performance, and thorough knowledge of the markets in which the company is positioned. In the end, a comparative analysis of the methods adopted as well as of the assumptions made in an Equity Report published by J.P. Morgan with those of this dissertation was performed. It was possible to conclude that although different approaches have been considered, the investment recommendation presented by the Report points in the same direction as that of this dissertation.