BROADCOM INC (1AVGO.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1AVGO - US11135F1012 - Common Stock
272.35 EUR
-9.3 (-3.3%)
1AVGO gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 68 industry peers in the Semiconductors & Semiconductor Equipment industry. 1AVGO has an excellent profitability rating, but there are some minor concerns on its financial health. 1AVGO is valued quite expensively, but it does show have an excellent growth rating. These ratings would make 1AVGO suitable for growth investing!
1. Profitability
1.1 Basic Checks
- 1AVGO had positive earnings in the past year.
- In the past year 1AVGO had a positive cash flow from operations.
- 1AVGO had positive earnings in each of the past 5 years.
- In the past 5 years 1AVGO always reported a positive cash flow from operatings.
1.2 Ratios
- With a decent Return On Assets value of 13.52%, 1AVGO is doing good in the industry, outperforming 70.59% of the companies in the same industry.
- 1AVGO's Return On Equity of 28.45% is fine compared to the rest of the industry. 1AVGO outperforms 77.94% of its industry peers.
- 1AVGO has a Return On Invested Capital of 10.66%. This is comparable to the rest of the industry: 1AVGO outperforms 57.35% of its industry peers.
- 1AVGO had an Average Return On Invested Capital over the past 3 years of 10.89%. This is below the industry average of 14.62%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.52% | ||
| ROE | 28.45% | ||
| ROIC | 10.66% |
ROA(3y)12.13%
ROA(5y)12.05%
ROE(3y)31.95%
ROE(5y)34.21%
ROIC(3y)10.89%
ROIC(5y)10.78%
1.3 Margins
- 1AVGO's Profit Margin of 36.20% is amongst the best of the industry. 1AVGO outperforms 95.59% of its industry peers.
- 1AVGO's Profit Margin has improved in the last couple of years.
- The Operating Margin of 1AVGO (40.94%) is better than 94.12% of its industry peers.
- In the last couple of years the Operating Margin of 1AVGO has grown nicely.
- Looking at the Gross Margin, with a value of 67.89%, 1AVGO belongs to the top of the industry, outperforming 92.65% of the companies in the same industry.
- 1AVGO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 40.94% | ||
| PM (TTM) | 36.2% | ||
| GM | 67.89% |
OM growth 3Y-1.65%
OM growth 5Y17.55%
PM growth 3Y2.31%
PM growth 5Y26.56%
GM growth 3Y0.66%
GM growth 5Y3.66%
2. Health
2.1 Basic Checks
- 1AVGO has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- The number of shares outstanding for 1AVGO has been increased compared to 1 year ago.
- Compared to 5 years ago, 1AVGO has more shares outstanding
- Compared to 1 year ago, 1AVGO has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 11.45 indicates that 1AVGO is not in any danger for bankruptcy at the moment.
- With a decent Altman-Z score value of 11.45, 1AVGO is doing good in the industry, outperforming 69.12% of the companies in the same industry.
- 1AVGO has a debt to FCF ratio of 2.42. This is a good value and a sign of high solvency as 1AVGO would need 2.42 years to pay back of all of its debts.
- 1AVGO has a Debt to FCF ratio (2.42) which is in line with its industry peers.
- 1AVGO has a Debt/Equity ratio of 0.76. This is a neutral value indicating 1AVGO is somewhat dependend on debt financing.
- 1AVGO's Debt to Equity ratio of 0.76 is on the low side compared to the rest of the industry. 1AVGO is outperformed by 83.82% of its industry peers.
- Even though the debt/equity ratio score it not favorable for 1AVGO, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 2.42 | ||
| Altman-Z | 11.45 |
ROIC/WACC1
WACC10.64%
2.3 Liquidity
- 1AVGO has a Current Ratio of 1.71. This is a normal value and indicates that 1AVGO is financially healthy and should not expect problems in meeting its short term obligations.
- With a Current ratio value of 1.71, 1AVGO is not doing good in the industry: 76.47% of the companies in the same industry are doing better.
- 1AVGO has a Quick Ratio of 1.58. This is a normal value and indicates that 1AVGO is financially healthy and should not expect problems in meeting its short term obligations.
- The Quick ratio of 1AVGO (1.58) is worse than 63.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.71 | ||
| Quick Ratio | 1.58 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 40.47% over the past year.
- The Earnings Per Share has been growing by 25.23% on average over the past years. This is a very strong growth
- 1AVGO shows a strong growth in Revenue. In the last year, the Revenue has grown by 23.87%.
- 1AVGO shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 21.74% yearly.
EPS 1Y (TTM)40.47%
EPS 3Y21.91%
EPS 5Y25.23%
EPS Q2Q%37.32%
Revenue 1Y (TTM)23.87%
Revenue growth 3Y24.38%
Revenue growth 5Y21.74%
Sales Q2Q%28.18%
3.2 Future
- Based on estimates for the next years, 1AVGO will show a very strong growth in Earnings Per Share. The EPS will grow by 28.32% on average per year.
- Based on estimates for the next years, 1AVGO will show a very strong growth in Revenue. The Revenue will grow by 29.08% on average per year.
EPS Next Y50.6%
EPS Next 2Y43.78%
EPS Next 3Y36.58%
EPS Next 5Y28.32%
Revenue Next Year52.87%
Revenue Next 2Y44.4%
Revenue Next 3Y37.56%
Revenue Next 5Y29.08%
3.3 Evolution
- The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 46.72 indicates a quite expensive valuation of 1AVGO.
- Compared to the rest of the industry, the Price/Earnings ratio of 1AVGO is on the same level as its industry peers.
- 1AVGO is valuated expensively when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- 1AVGO is valuated quite expensively with a Price/Forward Earnings ratio of 31.04.
- The rest of the industry has a similar Price/Forward Earnings ratio as 1AVGO.
- 1AVGO is valuated rather expensively when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 46.72 | ||
| Fwd PE | 31.04 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, 1AVGO is valued a bit more expensive than the industry average as 75.00% of the companies are valued more cheaply.
- 1AVGO's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 55.94 | ||
| EV/EBITDA | 45.97 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- The decent profitability rating of 1AVGO may justify a higher PE ratio.
- 1AVGO's earnings are expected to grow with 36.58% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.92
PEG (5Y)1.85
EPS Next 2Y43.78%
EPS Next 3Y36.58%
5. Dividend
5.1 Amount
- 1AVGO has a yearly dividend return of 0.76%, which is pretty low.
- Compared to an average industry Dividend Yield of 0.72, 1AVGO pays a bit more dividend than its industry peers.
- With a Dividend Yield of 0.76, 1AVGO pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.76% |
5.2 History
- On average, the dividend of 1AVGO grows each year by 11.45%, which is quite nice.
Dividend Growth(5Y)11.45%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 48.18% of the earnings are spent on dividend by 1AVGO. This is a bit on the high side, but may be sustainable.
- 1AVGO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP48.18%
EPS Next 2Y43.78%
EPS Next 3Y36.58%
BROADCOM INC / 1AVGO.MI FAQ
Can you provide the ChartMill fundamental rating for BROADCOM INC?
ChartMill assigns a fundamental rating of 6 / 10 to 1AVGO.MI.
Can you provide the valuation status for BROADCOM INC?
ChartMill assigns a valuation rating of 3 / 10 to BROADCOM INC (1AVGO.MI). This can be considered as Overvalued.
What is the profitability of 1AVGO stock?
BROADCOM INC (1AVGO.MI) has a profitability rating of 7 / 10.
Can you provide the PE and PB ratios for 1AVGO stock?
The Price/Earnings (PE) ratio for BROADCOM INC (1AVGO.MI) is 46.72 and the Price/Book (PB) ratio is 18.52.
Can you provide the expected EPS growth for 1AVGO stock?
The Earnings per Share (EPS) of BROADCOM INC (1AVGO.MI) is expected to grow by 50.6% in the next year.