Is Nvidia Corp (NASDAQ:NVDA) having difficulty to pay out its debt?


USD 169.23  12.84  8.21%   

The stock is undergoing above-average trading activities. As many millenniums are trying to avoid technology space, it makes sense to go over Nvidia Corp a little further and try to understand its current market patterns. We will evaluate why recent Nvidia Corp price moves suggest a bounce in November.
Published over a month ago
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Nvidia Corp currently holds 11.85 B in liabilities with Debt to Equity (D/E) ratio of 0.45, which is about average as compared to similar companies. The entity has a current ratio of 5.21, suggesting that it is liquid enough and is able to pay its financial obligations when due. Debt can assist Nvidia Corp until it has trouble settling it off, either with new capital or with free cash flow. So, Nvidia Corp's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Nvidia Corp sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Nvidia to invest in growth at high rates of return. When we think about Nvidia Corp's use of debt, we should always consider it together with cash and equity.
Nvidia Corp financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Nvidia Corp, including all of Nvidia Corp's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Nvidia Corp assets, the company is considered highly leveraged. Understanding the composition and structure of overall Nvidia Corp debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.
Please read more on our technical analysis page.

Understanding Nvidia Total Debt

Nvidia Corp liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Nvidia Corp has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Nvidia Corp balance sheet include debt obligations and money owed to different Nvidia Corp vendors, workers, and loan providers. Below is the chart of Nvidia main long-term debt accounts currently reported on its balance sheet.
You can use Nvidia Corp financial leverage analysis tool to get a better grip on understanding its financial position

How important is Nvidia Corp's Liquidity

Nvidia Corp financial leverage refers to using borrowed capital as a funding source to finance Nvidia Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Nvidia Corp financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Nvidia Corp's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Nvidia Corp, but it might be worth checking our own buy vs. sell analysis

Sale by Mark Stevens of 87500 shares of Nvidia Corp

Legal trades by Nvidia Corp insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Nvidia insider trading alert for sale of common stock by Mark Stevens, the corporate stakeholder, on 17th of October 2022. This event was filed by Nvidia Corp with SEC on 2022-10-17. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Is Nvidia Corp valued fairly by the market?

The firm reported the previous year's revenue of 29.54 B. Net Income was 9.46 B with profit before overhead, payroll, taxes, and interest of 17.48 B.

Nvidia Corp has 84 percent odds to go over $134 this year

Nvidia Corp current maximum drawdown builds up over 17.08. Nvidia Corp exhibits very low volatility with skewness of -0.48 and kurtosis of 0.5. However, we advise investors to further study Nvidia Corp technical indicators to ensure that all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Nvidia Corp's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Nvidia Corp's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Whereas some other companies in the semiconductors industry are either recovering or due for a correction, Nvidia Corp may not be performing as strong as the other in terms of long-term growth potentials. The inconsistency in the assessment between current Nvidia valuation and our trade advice on Nvidia Corp is due to the recent market swings and your selection of investing horizon. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Nvidia Corp.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Nvidia Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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