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엔비디아는 연초 대비 198% 급등했으나 AI 붐은 과거 인터넷·EV·대마 버블과 유사하다고 경고. 내부자 매도(6월 약 1.4억 달러)와 PE 190 등 고밸류에이션을 지적. DCF 스타일 분석 툴로 가정별 적정가를 계산해 현재가가 고평가이며 10년 연 11% 수익률을 가정해도 하방 위험이 크다고 주장. 유료 구독 홍보 포함.
다듬은 글
Nvidia is up 198% year-to-date. Obviously, the AI boom is getting everybody excited and it's starting to sound a lot like the internet, computers back in the '80s, real estate back in 2005, electric vehicles 4 or 5 a few years ago, cannabis a little bit before that. Do you get my point? Every single time the new hype comes in, it's this is the different one.
Okay, now in this video, I'm not sitting here going to tell you Well, there's going to be a lot of things I'm going to tell you, but with Nvidia, what I do is I want to teach this process that . And when you buy a stock, you're buying a piece of business. So, if you're a beginner investor or an advanced investor, stay the entire time cuz we're going to go through the company beginner levels all the way to advanced levels.
We're going to finish off with our stock analyzer tool that will show you, based on our assumptions about the future, what Nvidia has to do in order to justify its today's price. And also, based on the assumptions about the future, what that means for the today's price on Nvidia. So, let's let's welcome Mo back.
Thanks. Our newest engaged member of the Everything Money community. Hi. So, like I said, Nvidia's up 198 and 1/2% year-to-date. And Mo, pull up this Nasdaq insider trading number. So, let's go here to sells. So, these are shares sold and the dates that they all sold. And you can see the number of shares that they have been selling in June and then coming into May.
look at June alone. Yeah, June alone, I know. So, we have 118, 119, 169 + 120, so call it 170 + 120 is 270 + another 70 5. So, 350,000 shares at an average price of what? Call it 400. Sure. It's 140 million just in June. Now you might sit there and say If you look over here though, here's the interesting part.
Here are the remaining shares held. So some of these are pretty sizable transaction. I mean look at this. This is a 7.5% of what they owned. Yeah. Not a big amount. Big big amount. Yeah. Joan Harvey Jones here sold What is that? A a fifth of what he his total shares outstanding? Yeah, Harvey Jones made two sales here.
Steven Marks made two sales here. Yeah. Let's see if these people and these people were not necessarily selling back in we're looking into February, March. They started selling in June. Right after that big bump happened. And I think that was in late May if I don't if I remember correctly. Yeah, and that's the thing guys.
You got to remember a couple of things. One, people will sell for a thousand reasons. Absolutely. The thing is though, it's very interesting that it's really really seems like it's accelerated a lot cuz look at the last Look at the number of shares sold in the last three months versus the last 12 months.
Oh, actually it's actually not that that bad. No, it's not that bad. Number of shares bought in the last three months 6,000 shares. In the last 12 months 900,000 shares. Yeah. That to me is the indicator cuz there's only one reason to buy. What's the one reason one reason to buy? Want the stock price to go up.
We're going to make money. Yep. So when it comes to AI, I want you to not make sure make sure you're not falling for a trap. Do I think AI is going to be a big part of the future? Absolutely. I do I mean we've AI has become better and better and better. It's not new. It's just become so much better.
But just like the internet was a big part of the future. How many internet companies went to zero? How many companies How many dot com and tech companies back in 2000 still have not surpassed their 2000 peak? That's the key guys. That's what we're trying to accentuate here. Okay? So let's check out some fundamentals on Nvidia.
All right, first off market cap of 1.05 trillion. This means we you bought every share outstanding, it would cost you 1.05 trillion dollars. Comparison though, look at the enterprise value though. Wow. 1.06 trillion. That difference right there is essentially their debt. So, they have very, very, very little debt.
Unbelievable. Why do they still have this dividends paid of 395 million? I just think that's hilarious. But, look at this guys. Current PE of 190, 5-year PE of 199. Is that sustainable? It's a question. Listen, Tesla has shown it's sustainable. Amazon showed it was showed it was sustainable. And so, a lot of people sit there and say, "Hey, this is the next one that's This is the next big one that's sustainable.
Yeah, and I don't blame them for thinking that at all. But, I look at it saying, "y're a weighing machine." This is part of the weight. They have a great 5-year return on invested capital. That means they get a great return on the money invested in the business. But guys, again, if it was as simple as buying the highest return on invested capitals, you would just list your companies, sort them by return on invested capital, and just buy all the top of them.
Yeah. The end of the day, you still overpay. Remember the Charlie Munger quote the the quote that people always misquote. He basically says, "Even if you pay an expensive-looking price for a company that has a good return on invested capital, you should do okay." Expensive-looking doesn't mean this.
He means like, "Hey, if you're paying a 25 to 30 PE on a company." Cuz that's what they bought Coke for was a 30 PE. I look at this thing and I say man, this is not expensive-looking. This is expensive. Is 190 the new 30? Well, on a trillion It's one thing also, this is a billion-dollar company. Exactly, it is.
Okay, but it's a trillion-dollar company. All right, let's check out some other things. Look at the eight pillars of this company. Shares outstanding, I don't blame them increasing their shares outstanding. If I were them, I'd issued a billion shares right now. probably why their enterprise value is where it is.
Why take on debt? Yeah, why take on debt? So guys, what that means is when the stock is expensive and a company can issue shares, they'd like to do that instead of taking on debt. Cuz on a debt, if you issue $10 billion of debt, you owe that 10 billion back no matter what your stock price does. But if you issue $10 billion in shares, what's going on there?
Well, if the stock price goes to a billion, that same 10 billion becomes a billion, you still got your 10 billion in cash, you don't owe anybody anything. Right? But that's why when a stock is cheap, we don't want them issuing cheap shares. Okay? And of course, our 5-year price of free cash flow of 200.
Guys, just show me a company that's had 200 price of free cash flow last 5 years that was a trillion-dollar company that it ended up okay with four. That's the hard part. All right, Mo. Um so remember guys, if you're part of our community, you buy our software, you can do up to 12 pillars, custom pillars, and they'll pop up at the top here.
Like Mo has I have I have two populated right now. 5-year ROIC greater than 12 and a 5-year free cash flow greater than zero. And this is 5-year free cash flow growth. Growth greater than zero. And the reason I probably threw this in, I was probably running a very basic screener a couple of weeks ago.
Right. That's it. So this is a great way to screen stocks. Absolutely. Okay, so let's check out some analyst estimates. Mo, you want to go over them Yeah, let's see what we have here. This is going to be very interesting. Wow. Okay. Earnings per share growth is somewhere around 30 Well, around 30% maybe actually a little more than 30% over the next 5 years.
That is incredible. Yeah. That is incredible seeing as where we are right now. Look at this, Mo. Yes. At the $13 per share. Remember guys, analysts tend to be very optimistic. Mhm. At the current price of 420, this is how much? 35 times more? Is that what it is? It's selling for 35 PE of 20 of basically January 2028 year end.
I would have liked to see I would I wish we can go back. I mean, I'm sure we can. Go Go and see analyst estimates when they were at $164 a share and see if they have the same thing here. Yeah. Because they should have been higher. Revenue side? Huge growth. Big growth. Huge growth. Two and a half times.
Yeah. Almost three times um revenue growth. Uh they were Over like five years. on AI is very high right now. Guys, I want to repeat this. Go back. For those of you who are younger, you've seen EV, electric vehicle hype. You've seen and look at how that worked out. Apart from Tesla, every single one of them down like 95% and even Tesla is down 40% from its high or 35% from its high.
And it was down 75% from its high recently. Look at Look at um Look at cannabis. Guys, cannabis was all the rage five, six years ago. I got pitched so many I asked my brother the other day, "Mikey, how many times were you pitched cannabis?" He goes, "Oh my god, so many times." Now I hear nothing about it.
Mhm. Now I hear nothing about it. You can go You can go and look at crypto. I mean, it's it's still it's Bitcoin's still up a lot. It's still up a lot, but don't get me It's still What was it? $69,000? It's 30 right now. So, you saw the hype that it was previously It went from 67 down to 15 before rebounding to 30 and that would coincided with Whenever somebody tells me that crypto is a hedge on the stock market, um look at it year-to-date.
What's What's Bitcoin up to year year-to-date? It's like 8 900% or something like that. Something crazy, like 80%. Year-to-date, pull it up. 85% Yeah. up year-to-date. Yeah. Does that sound like it's a hedge? No. No. A hedge means it would work inversely. But these are the things that happen when you get behind hype.
Right. So, now guys, the question becomes what's a reasonable price to pay for the company? And that's why we have ite. It was used 1.3 million times by our users last year. Absolutely incredible. You can do a 1 to 20-year analysis. We tend to pick 10. Now guys, if you like what you've seen so far in the software, running a special, $7 for for days.
That's $1 a day to get all the software and all the tools here. And our real estate calculator right here in the next month or so, when it becomes official and done, it's only going to be available to people who are already existing users of the site. Once this real estate calculator comes out, it'll be a separate add-on.
But if you sign up now, you get it included. You're grandfathered in. So, $7 for 7 days, everythingmoney.com, check it out. You get all this plus our community of 1,000 investors because guys, it can be lonely to be an investor out there. These are thousands of like-minded people that can talk to you about your investment ideas and it's super super life-changing for you for a dollar per day.
So, check it out. So, Mo, do you want to give me your estimates? Cuz one of the things we want to do here is I really want you to go high on the high numbers. Cuz the low, middle, and high guys, the key here is to sit there and see where this company stands. And with the hype right now, if you believe that , this is what's going to tell you if it's overpriced or not.
Cuz we're making assumptions about cash flow here, revenue growth, profit margin, free cash flow margin, and assigning a multiple. That's the big key here. So, Mo, 10-year analysis, give me a low, middle, and high for revenue growth. And I'll probably argue with you on these, but just try it. was thinking 10, 20, and 30, but I don't know if you want to go higher than 30.
Well, 30's pretty high. I think 30's insanely high. So, 10, 20, and 30%. Let's see. So, 30% a year for 10 years would take the revenue from 27 billion to 372 billion dollars. Right now, analyst estimates are for 71 billion in in 5 years. So, that would be a huge That would be a four That would be 5x in from from year five to year 10.
I think that's a really great exercise to show how crazy that would be. Great. possible? Sure. And the 10% revenue growth on the low side for 10 years would take the revenue to 70 billion. So, a little bit less than what analysts are expec- less than not a little bit significantly less than what analysts are expecting.
Mhm. What about profit margin, Mo? Um I would have to think well, let's see. Cuz look at their historical. 5 and 10 years pretty consistent. consistent. Yeah. 25 27 and 29. Let's go 25. Let's go 24. I I I think I think 26 is probably the number for that. Right. 28 and 32. I really want to go high in this high one.
Okay. Cuz I want to see what it takes for this price to be justified reasonable. What about free cash flow? Same thing? would do the same thing. So guys, over long periods of time, your free cash flow and your net income and your profit margin should be the same. So, if you see right here, it's very consistent.
I give Nvidia a lot of credit for that. They've had very consistent free cash flow to to net income, which is great. Now, here's the question. PE About 18, 24, and 30? Okay. 18. I think 24 is too high. Well, I think it is, too, but Why don't we go 16, 22, and 28? Because 16 is very low, but and 22 is like, "Hey, listen.
I'm in the middle range." But guys, I will say, if they can do 30% revenue growth over the next decade, I'd give them a 30 PE. Okay. That's That's unbelievable if they can do that. Don't you think? I'm just going to change this last one to 30. Okay. Yeah, yeah. Don't make it even. So guys, remember, you're looking at 190 here.
Don't fall for the Meet Kevin it um you know, stupidity of saying that because it's 190 now, 100's a good deal. What I want you to do is start at 15 to 16. That's the historical average for PE. And from there, go up and down based on growth rate, revenue growth, and return on invested capital. But what we see here is the return on invested capital has decreased.
right. Okay, is that something to consider? That's a That's something to consider there. All right. So, I want you to remember that. If you don't understand that, but it's it makes sense that you're hearing it, we're the place for you. Just keep listening, watch more videos. If you just think these guys are idiots, 190 hundreds of 50's a reasonable deal, then I want you to do me a favor, unsubscribe.
Don't watch the video anymore, you are wasting your time. Don't waste your time listening to me cuz nothing I'm going to say is going to convince you otherwise. Now, you might be confused by this and say, "Well, wait a second. 190 but historical average is 15 or 16. What Paul's saying makes sense." Then they're probably on to something cuz it's not going to it's not going to be something where you just go, "Oh my god, I'm a value investor right now." But it'll make sense to you go, "Wait a second, that makes sense." And I'm okay if it doesn't make sense to you, but don't waste your time.
There's no reason to waste your time watching me. There's plenty of other idiots out there to watch. There's Stock Mo, Meet Kevin, Tom Nash, all those guys. Watch them till you're blue in the face and uh I think you'll be back in the next few years. So, desired annual return. Now, guys, here's where we put the return we want.
This is where you put your margin of safety in. The higher your return, the higher your assumptions, the more return you should have cuz you need more margin of safety. So, Mo, what kind of mar What kind of desired annual return do you want here? Thinking of 11 on the low end. Okay. Maybe 15 in the middle.
And I think I have to have over 20 on the high side. Let's do this. Just to show what we did with this is let's go lower on the high side. Let's go 11, 14, and 17. All right. So, guys, what this says is if these things happen, I'm okay making 11% cuz I made low assumptions. But as I made higher assumptions, I need to have a higher return.
Cuz there's more risk. More risk and less likely to have it happening. Hit the analyze button. Guys, oh my god, Mo. Wow. Look at this. Wow. The highest price is 330. Wow. The highest price is 330. The lowest price, 56. So, what this means is if the middle if the if you bought today's price of 425 lose 11.69%.
If the highest assumptions occur, you're going to make 13.8. You might look at this going, "Damn, that's a lot of money." Yeah, but you're factoring in what kind of returns. What kind of of results? Assumptions. 30% revenue growth for 10 years, 32% margins, 30 PE, and a 17% return. Why don't we change that return and see see if you use your 10% return.
Oh, it's going to be way higher than that. The price today will be way higher. Let's see. 590. So, if you believe all these guys, you should be willing to pay 590 for the stock. Mhm. More power to you. It could happen, but what has to happen in this world for that to actually happen? That's the question.
And if you do this 100 times and buy based on the highest assumptions, there'll be a couple that work out for you, but there'll be far more that do not. Right. So, guys, again, everythingmoney.com, $1 per day for 7 days. Check it out. It's well worth it and if this makes sense to you, welcome to the club. Thanks, guys.
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