BROADCOM INC (AVGO)
US11135F1012 - Common Stock
AVGO gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 108 industry peers in the Semiconductors & Semiconductor Equipment industry. AVGO has an excellent profitability rating, but there are some minor concerns on its financial health. AVGO is not priced too expensively while it is growing strongly. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
In the past year AVGO was profitable.
AVGO had a positive operating cash flow in the past year.
AVGO had positive earnings in each of the past 5 years.
AVGO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AVGO has a Return On Assets (3.56%) which is comparable to the rest of the industry.
AVGO has a Return On Equity of 8.71%. This is in the better half of the industry: AVGO outperforms 62.96% of its industry peers.
With a decent Return On Invested Capital value of 8.05%, AVGO is doing good in the industry, outperforming 75.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AVGO is above the industry average of 11.24%.
The last Return On Invested Capital (8.05%) for AVGO is well below the 3 year average (14.85%), which needs to be investigated, but indicates that AVGO had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.56% | ||
| ROE | 8.71% | ||
| ROIC | 8.05% |
ROA(3y)12.74%
ROA(5y)10.05%
ROE(3y)38.95%
ROE(5y)30.76%
ROIC(3y)14.85%
ROIC(5y)11.83%
1.3 Margins
Looking at the Profit Margin, with a value of 11.43%, AVGO is in the better half of the industry, outperforming 65.74% of the companies in the same industry.
AVGO's Profit Margin has been stable in the last couple of years.
The Operating Margin of AVGO (29.89%) is better than 91.67% of its industry peers.
AVGO's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 63.53%, AVGO belongs to the top of the industry, outperforming 88.89% of the companies in the same industry.
AVGO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.89% | ||
| PM (TTM) | 11.43% | ||
| GM | 63.53% |
OM growth 3Y-1.09%
OM growth 5Y10.2%
PM growth 3Y-21.3%
PM growth 5Y-0.85%
GM growth 3Y1.13%
GM growth 5Y2.71%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AVGO is destroying value.
AVGO has more shares outstanding than it did 1 year ago.
The number of shares outstanding for AVGO has been increased compared to 5 years ago.
Compared to 1 year ago, AVGO has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 6.96 indicates that AVGO is not in any danger for bankruptcy at the moment.
The Altman-Z score of AVGO (6.96) is better than 68.52% of its industry peers.
AVGO has a debt to FCF ratio of 3.48. This is a good value and a sign of high solvency as AVGO would need 3.48 years to pay back of all of its debts.
AVGO has a Debt to FCF ratio of 3.48. This is in the better half of the industry: AVGO outperforms 65.74% of its industry peers.
A Debt/Equity ratio of 0.98 indicates that AVGO is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.98, AVGO is not doing good in the industry: 84.26% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.98 | ||
| Debt/FCF | 3.48 | ||
| Altman-Z | 6.96 |
ROIC/WACC0.52
WACC15.42%
2.3 Liquidity
AVGO has a Current Ratio of 1.17. This is a normal value and indicates that AVGO is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.17, AVGO is doing worse than 86.11% of the companies in the same industry.
AVGO has a Quick Ratio of 1.07. This is a normal value and indicates that AVGO is financially healthy and should not expect problems in meeting its short term obligations.
AVGO's Quick ratio of 1.07 is on the low side compared to the rest of the industry. AVGO is outperformed by 81.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.17 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
AVGO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.91%, which is quite good.
Measured over the past years, AVGO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 17.90% on average per year.
The Revenue has grown by 43.99% in the past year. This is a very strong growth!
Measured over the past years, AVGO shows a quite strong growth in Revenue. The Revenue has been growing by 17.94% on average per year.
EPS 1Y (TTM)14.91%
EPS 3Y20.14%
EPS 5Y17.9%
EPS Q2Q%28.39%
Revenue 1Y (TTM)43.99%
Revenue growth 3Y23.39%
Revenue growth 5Y17.94%
Sales Q2Q%51.2%
3.2 Future
AVGO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 25.85% yearly.
AVGO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.46% yearly.
EPS Next Y30.66%
EPS Next 2Y24.67%
EPS Next 3Y22.57%
EPS Next 5Y25.85%
Revenue Next Year18%
Revenue Next 2Y16.39%
Revenue Next 3Y15.52%
Revenue Next 5Y10.46%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
AVGO is valuated quite expensively with a Price/Earnings ratio of 45.43.
AVGO's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of AVGO to the average of the S&P500 Index (27.73), we can say AVGO is valued expensively.
AVGO is valuated quite expensively with a Price/Forward Earnings ratio of 34.81.
AVGO's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of AVGO to the average of the S&P500 Index (22.83), we can say AVGO is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.43 | ||
| Fwd PE | 34.81 |
4.2 Price Multiples
AVGO's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, AVGO is valued a bit cheaper than the industry average as 68.52% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 53.12 | ||
| EV/EBITDA | 42.85 |
4.3 Compensation for Growth
AVGO's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
AVGO has an outstanding profitability rating, which may justify a higher PE ratio.
AVGO's earnings are expected to grow with 22.57% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.48
PEG (5Y)2.54
EPS Next 2Y24.67%
EPS Next 3Y22.57%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.08%, AVGO has a reasonable but not impressive dividend return.
AVGO's Dividend Yield is a higher than the industry average which is at 2.31.
With a Dividend Yield of 1.08, AVGO pays less dividend than the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.08% |
5.2 History
On average, the dividend of AVGO grows each year by 16.22%, which is quite nice.
AVGO has been paying a dividend for at least 10 years, so it has a reliable track record.
AVGO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)16.22%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
166.48% of the earnings are spent on dividend by AVGO. This is not a sustainable payout ratio.
The dividend of AVGO is growing, but earnings are growing more, so the dividend growth is sustainable.
DP166.48%
EPS Next 2Y24.67%
EPS Next 3Y22.57%
BROADCOM INC
NASDAQ:AVGO (12/20/2024, 8:00:01 PM)
After market: 222.5 +1.71 (+0.77%)220.79
+2.47 (+1.13%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners79.28%
Inst Owner Change840.35%
Ins Owners19.24%
Ins Owner Change26.32%
Market Cap1031.22B
Analysts83.04
Price Target200.15 (-9.35%)
Short Float %1.45%
Short Ratio2.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.08% |
Dividend Growth(5Y)16.22%
DP166.48%
Div Incr Years13
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.93%
Min EPS beat(2)0.77%
Max EPS beat(2)1.09%
EPS beat(4)3
Avg EPS beat(4)1.41%
Min EPS beat(4)-0.91%
Max EPS beat(4)4.69%
EPS beat(8)5
Avg EPS beat(8)0.52%
EPS beat(12)7
Avg EPS beat(12)0.62%
EPS beat(16)8
Avg EPS beat(16)0.33%
Revenue beat(2)0
Avg Revenue beat(2)-1.57%
Min Revenue beat(2)-2.02%
Max Revenue beat(2)-1.11%
Revenue beat(4)2
Avg Revenue beat(4)-0.31%
Min Revenue beat(4)-2.02%
Max Revenue beat(4)1.79%
Revenue beat(8)2
Avg Revenue beat(8)-1.22%
Revenue beat(12)3
Avg Revenue beat(12)-1.03%
Revenue beat(16)3
Avg Revenue beat(16)-1.08%
PT rev (1m)0.4%
PT rev (3m)0.9%
EPS NQ rev (1m)1.01%
EPS NQ rev (3m)1.01%
EPS NY rev (1m)0.87%
EPS NY rev (3m)1.25%
Revenue NQ rev (1m)0.17%
Revenue NQ rev (3m)0.17%
Revenue NY rev (1m)0.49%
Revenue NY rev (3m)1.43%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.43 | ||
| Fwd PE | 34.81 | ||
| P/S | 19.99 | ||
| P/FCF | 53.12 | ||
| P/OCF | 51.66 | ||
| P/B | 15.24 | ||
| P/tB | N/A | ||
| EV/EBITDA | 42.85 |
EPS(TTM)4.86
EY2.2%
EPS(NY)6.34
Fwd EY2.87%
FCF(TTM)4.16
FCFY1.88%
OCF(TTM)4.27
OCFY1.94%
SpS11.04
BVpS14.49
TBVpS-15.15
PEG (NY)1.48
PEG (5Y)2.54
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.56% | ||
| ROE | 8.71% | ||
| ROCE | 10.35% | ||
| ROIC | 8.05% | ||
| ROICexc | 8.59% | ||
| ROICexgc | 1047.65% | ||
| OM | 29.89% | ||
| PM (TTM) | 11.43% | ||
| GM | 63.53% | ||
| FCFM | 37.64% |
ROA(3y)12.74%
ROA(5y)10.05%
ROE(3y)38.95%
ROE(5y)30.76%
ROIC(3y)14.85%
ROIC(5y)11.83%
ROICexc(3y)18.13%
ROICexc(5y)14.34%
ROICexgc(3y)592.61%
ROICexgc(5y)453.72%
ROCE(3y)19.11%
ROCE(5y)15.22%
ROICexcg growth 3Y54.09%
ROICexcg growth 5Y49.08%
ROICexc growth 3Y-9.38%
ROICexc growth 5Y8.48%
OM growth 3Y-1.09%
OM growth 5Y10.2%
PM growth 3Y-21.3%
PM growth 5Y-0.85%
GM growth 3Y1.13%
GM growth 5Y2.71%
F-Score5
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.98 | ||
| Debt/FCF | 3.48 | ||
| Debt/EBITDA | 2.61 | ||
| Cap/Depr | 5.47% | ||
| Cap/Sales | 1.06% | ||
| Interest Coverage | 4.74 | ||
| Cash Conversion | 78.51% | ||
| Profit Quality | 329.33% | ||
| Current Ratio | 1.17 | ||
| Quick Ratio | 1.07 | ||
| Altman-Z | 6.96 |
F-Score5
WACC15.42%
ROIC/WACC0.52
Cap/Depr(3y)8.59%
Cap/Depr(5y)7.96%
Cap/Sales(3y)1.2%
Cap/Sales(5y)1.43%
Profit Quality(3y)199.96%
Profit Quality(5y)248.47%
High Growth Momentum
Growth
EPS 1Y (TTM)14.91%
EPS 3Y20.14%
EPS 5Y17.9%
EPS Q2Q%28.39%
EPS Next Y30.66%
EPS Next 2Y24.67%
EPS Next 3Y22.57%
EPS Next 5Y25.85%
Revenue 1Y (TTM)43.99%
Revenue growth 3Y23.39%
Revenue growth 5Y17.94%
Sales Q2Q%51.2%
Revenue Next Year18%
Revenue Next 2Y16.39%
Revenue Next 3Y15.52%
Revenue Next 5Y10.46%
EBIT growth 1Y-6.31%
EBIT growth 3Y22.05%
EBIT growth 5Y29.97%
EBIT Next Year33.84%
EBIT Next 3Y21.71%
EBIT Next 5Y20.86%
FCF growth 1Y10.1%
FCF growth 3Y13.38%
FCF growth 5Y15.95%
OCF growth 1Y10.38%
OCF growth 3Y13.19%
OCF growth 5Y15.53%