A takeover of Nvidia Corp. (NVDA) by Intel Corp. (INTC), a source of some speculation, could be a tough pill for Intel to swallow. Our back-of-the-envelope buyout valuation, based on how much hypothetical acquisition debt could be supported by the target company’s cash flow, comes to about $24 per share at best, and even that involves some very aggressive assumptions: a skimpy 1.25 interest coverage ratio, and capital spending being only 25 percent of depreciation, versus 80 percent at present. To offer Nvidia shareholders even the current price would involve significant dilution for Intel; so much the worse if, as would seem likely, there’s a buyout premium and/or we revert to more reasonable assumptions.

That does not necessarily mean Nvidia is overpriced. Equity investor pay for future growth all the time, and in Nvidia’s case, that growth seems to come at an acceptable price. We estimate that an investment here could break even if Nvidia’s earnings per share grows at or above a 10 percent annual rate over the next five years. Analysts, focusing on such catalysts as the growth of gaming and the more graphics-intensive nature of “Vista,” expect EPS to grow at nearly double that pace.

Still, when it comes to M&A, companies don’t always play by the numbers. Case in point: Boston Scientific Corp. (BSX) and its so-far unsatisfying purchase of Guidant Corp. But if no deal materializes, Nvidia bulls would wind up holding, not the bag, but a reasonably-valued growth play.