Publicação
Equity valuation: NVIDIA Corporation
| Resumo: | This report was developed to determine the fair value of NVIDIA’s shares on 29 January 2023 and to make a comparison between the obtained value and the actual close price observed at that date. The final goal is to understand whether the shares were overvalued or undervalued in relation to the market price. NVIDIA is one of the largest technology companies in the world, which was founded in 1993 by three computer scientists and has been growing ever since across several markets. Notably, NVIDIA became one of the select few companies globally to reach a market capitalization of $1 trillion, driven by its strategic positioning within the growing Artificial Intelligence market. The valuation process is carried out by using two distinct methodologies. The first one consists of the Discounted Cash Flows, namely the Free Cash Flow to the Firm, followed by a Relative Valuation, both supported by the literature review. All the underlying assumptions are supported by data from NVIDIA’s Annual Reports, macroeconomic trends, and industry research. Additionally, I make a sensitivity analysis to understand how the value changes when different assumptions are considered. Based on the results obtained from the different valuation methods, NVIDIA’s shares stood above their fair value at the period under examination, thus being considered overvalued. |
|---|---|
| Autores principais: | Gouveia, Francisco de Mesquita |
| Assunto: | NVIDIA Avaliação de empresas -- Business valuation DCF Discounted Cash Flow -- Avaliação por múltiplos Valuation using multiples |
| Ano: | 2023 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso restrito |
| Instituição associada: | ISCTE |
| Idioma: | inglês |
| Origem: | Repositório ISCTE |
| Resumo: | This report was developed to determine the fair value of NVIDIA’s shares on 29 January 2023 and to make a comparison between the obtained value and the actual close price observed at that date. The final goal is to understand whether the shares were overvalued or undervalued in relation to the market price. NVIDIA is one of the largest technology companies in the world, which was founded in 1993 by three computer scientists and has been growing ever since across several markets. Notably, NVIDIA became one of the select few companies globally to reach a market capitalization of $1 trillion, driven by its strategic positioning within the growing Artificial Intelligence market. The valuation process is carried out by using two distinct methodologies. The first one consists of the Discounted Cash Flows, namely the Free Cash Flow to the Firm, followed by a Relative Valuation, both supported by the literature review. All the underlying assumptions are supported by data from NVIDIA’s Annual Reports, macroeconomic trends, and industry research. Additionally, I make a sensitivity analysis to understand how the value changes when different assumptions are considered. Based on the results obtained from the different valuation methods, NVIDIA’s shares stood above their fair value at the period under examination, thus being considered overvalued. |
|---|