V - Better Than Nvidia? Top Investor Touts This Payment Firm's Durable Profits More 'Sustainable' | Benzinga
A prominent investor has drawn attention to a payments firm that boasts profit margins similar to those of NVIDIA Corporation (NASDAQ:NVDA) but is considered to be a more sustainable investment.
What Happened: Hannah Gooch-Peters, a global equity investment analyst at Sanlam Investments, pointed out that the current valuation of Nvidia might be overestimating the company’s future sales and profits. She made these remarks during a CNBC Pro Talks session at the London Business School, reported CNBC.
Gooch-Peters suggested that the sustainability of Nvidia’s profit margins should be questioned, given the company’s 75% gross margin and its reliance on hardware. She then contrasted Nvidia’s situation with that of Visa Inc (NYSE:V), which boasts a 60% operating profit margin and a robust “networking effect.”
"If you've got 75% gross margin, and it's a hardware company at the end of the day, you've got to ask yourself, what is the company's ability to sustain those gross margins?" she said.
She explained that as more banks, merchants, and consumers adopt Visa’s payment network, ...