BROADCOM INC (AVGO) Stock Fundamental Analysis
NASDAQ:AVGO - Nasdaq - US11135F1012 - Common Stock
Taking everything into account, AVGO scores 6 out of 10 in our fundamental rating. AVGO was compared to 109 industry peers in the Semiconductors & Semiconductor Equipment industry. While AVGO has a great profitability rating, there are some minor concerns on its financial health. AVGO is growing strongly while it is still valued neutral. This is a good combination! This makes AVGO very considerable for growth investing!
1. Profitability
1.1 Basic Checks
AVGO had positive earnings in the past year.
In the past year AVGO had a positive cash flow from operations.
AVGO had positive earnings in each of the past 5 years.
In the past 5 years AVGO always reported a positive cash flow from operatings.
1.2 Ratios
AVGO's Return On Assets of 3.56% is in line compared to the rest of the industry. AVGO outperforms 57.41% of its industry peers.
Looking at the Return On Equity, with a value of 8.71%, AVGO is in the better half of the industry, outperforming 62.04% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 7.96%, AVGO is in the better half of the industry, outperforming 74.07% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for AVGO is above the industry average of 11.96%.
The 3 year average ROIC (14.76%) for AVGO is well above the current ROIC(7.96%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.56% | ||
| ROE | 8.71% | ||
| ROIC | 7.96% |
ROA(3y)12.74%
ROA(5y)10.05%
ROE(3y)38.95%
ROE(5y)30.76%
ROIC(3y)14.76%
ROIC(5y)11.78%
1.3 Margins
With a decent Profit Margin value of 11.43%, AVGO is doing good in the industry, outperforming 64.81% of the companies in the same industry.
AVGO's Profit Margin has been stable in the last couple of years.
AVGO has a better Operating Margin (29.57%) than 91.67% of its industry peers.
In the last couple of years the Operating Margin of AVGO has grown nicely.
AVGO has a better Gross Margin (63.53%) than 88.89% of its industry peers.
In the last couple of years the Gross Margin of AVGO has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.57% | ||
| PM (TTM) | 11.43% | ||
| GM | 63.53% |
OM growth 3Y-2.23%
OM growth 5Y9.44%
PM growth 3Y-21.3%
PM growth 5Y-0.85%
GM growth 3Y1.13%
GM growth 5Y2.71%
2. Health
2.1 Basic Checks
AVGO 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 AVGO has been increased compared to 1 year ago.
Compared to 5 years ago, AVGO has more shares outstanding
AVGO has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 7.55 indicates that AVGO is not in any danger for bankruptcy at the moment.
AVGO has a better Altman-Z score (7.55) than 67.59% of its industry peers.
The Debt to FCF ratio of AVGO is 3.48, which is a good value as it means it would take AVGO, 3.48 years of fcf income to pay off 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.
AVGO has a Debt/Equity ratio of 0.98. This is a neutral value indicating AVGO is somewhat dependend on debt financing.
The Debt to Equity ratio of AVGO (0.98) is worse than 84.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.98 | ||
| Debt/FCF | 3.48 | ||
| Altman-Z | 7.55 |
ROIC/WACC0.54
WACC14.61%
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.
With a Current ratio value of 1.17, AVGO is not doing good in the industry: 86.11% of the companies in the same industry are doing better.
A Quick Ratio of 1.07 indicates that AVGO should not have too much problems paying its short term obligations.
The Quick ratio of AVGO (1.07) is worse than 82.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.17 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 14.91% over the past year.
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.
Looking at the last year, AVGO shows a very strong growth in Revenue. The Revenue has grown by 43.99%.
The Revenue has been growing by 17.94% on average over the past years. This is quite good.
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
Based on estimates for the next years, AVGO will show a very strong growth in Earnings Per Share. The EPS will grow by 24.06% on average per year.
The Revenue is expected to grow by 18.03% on average over the next years. This is quite good.
EPS Next Y31.79%
EPS Next 2Y25.25%
EPS Next 3Y22.5%
EPS Next 5Y24.06%
Revenue Next Year18.67%
Revenue Next 2Y17.06%
Revenue Next 3Y15.99%
Revenue Next 5Y18.03%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 49.57, which means the current valuation is very expensive for AVGO.
Compared to the rest of the industry, the Price/Earnings ratio of AVGO is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 28.19. AVGO is valued rather expensively when compared to this.
With a Price/Forward Earnings ratio of 37.65, AVGO can be considered very expensive at the moment.
AVGO's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.37, AVGO is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.57 | ||
| Fwd PE | 37.65 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AVGO is on the same level as its industry peers.
AVGO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. AVGO is cheaper than 65.74% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 58.17 | ||
| EV/EBITDA | 47.01 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of AVGO may justify a higher PE ratio.
A more expensive valuation may be justified as AVGO's earnings are expected to grow with 22.50% in the coming years.
PEG (NY)1.56
PEG (5Y)2.77
EPS Next 2Y25.25%
EPS Next 3Y22.5%
5. Dividend
5.1 Amount
AVGO has a Yearly Dividend Yield of 1.03%.
AVGO's Dividend Yield is a higher than the industry average which is at 2.27.
With a Dividend Yield of 1.03, AVGO pays less dividend than the S&P500 average, which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.03% |
5.2 History
The dividend of AVGO is nicely growing with an annual growth rate of 16.17%!
AVGO has been paying a dividend for at least 10 years, so it has a reliable track record.
AVGO has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)16.17%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
AVGO pays out 166.48% of its income as dividend. This is not a sustainable payout ratio.
AVGO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP166.48%
EPS Next 2Y25.25%
EPS Next 3Y22.5%
BROADCOM INC
NASDAQ:AVGO (1/22/2025, 8:06:08 PM)
Premarket: 238 -2.91 (-1.21%)240.91
+0.6 (+0.25%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners79.28%
Inst Owner Change0%
Ins Owners19.24%
Ins Owner Change16.05%
Market Cap1129.23B
Analysts82.98
Price Target234.57 (-2.63%)
Short Float %1.24%
Short Ratio1.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.03% |
Yearly Dividend2.22
Dividend Growth(5Y)16.17%
DP166.48%
Div Incr Years13
Div Non Decr Years13
Ex-DateN/A
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)-1.67%
Min Revenue beat(2)-2.22%
Max Revenue beat(2)-1.11%
Revenue beat(4)2
Avg Revenue beat(4)-0.36%
Min Revenue beat(4)-2.22%
Max Revenue beat(4)1.79%
Revenue beat(8)2
Avg Revenue beat(8)-1.24%
Revenue beat(12)3
Avg Revenue beat(12)-1.05%
Revenue beat(16)3
Avg Revenue beat(16)-1.09%
PT rev (1m)17.2%
PT rev (3m)19.33%
EPS NQ rev (1m)3.03%
EPS NQ rev (3m)4.06%
EPS NY rev (1m)0.87%
EPS NY rev (3m)2.13%
Revenue NQ rev (1m)0.17%
Revenue NQ rev (3m)0.35%
Revenue NY rev (1m)0.57%
Revenue NY rev (3m)1.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.57 | ||
| Fwd PE | 37.65 | ||
| P/S | 21.9 | ||
| P/FCF | 58.17 | ||
| P/OCF | 56.57 | ||
| P/B | 16.69 | ||
| P/tB | N/A | ||
| EV/EBITDA | 47.01 |
EPS(TTM)4.86
EY2.02%
EPS(NY)6.4
Fwd EY2.66%
FCF(TTM)4.14
FCFY1.72%
OCF(TTM)4.26
OCFY1.77%
SpS11
BVpS14.44
TBVpS-15.1
PEG (NY)1.56
PEG (5Y)2.77
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.56% | ||
| ROE | 8.71% | ||
| ROCE | 10.24% | ||
| ROIC | 7.96% | ||
| ROICexc | 8.49% | ||
| ROICexgc | 1036.3% | ||
| OM | 29.57% | ||
| 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)14.76%
ROIC(5y)11.78%
ROICexc(3y)18.03%
ROICexc(5y)14.28%
ROICexgc(3y)580.38%
ROICexgc(5y)446.38%
ROCE(3y)18.99%
ROCE(5y)15.15%
ROICexcg growth 3Y52.32%
ROICexcg growth 5Y48.04%
ROICexc growth 3Y-10.43%
ROICexc growth 5Y7.73%
OM growth 3Y-2.23%
OM growth 5Y9.44%
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 | 2.62 | ||
| Cap/Depr | 5.47% | ||
| Cap/Sales | 1.06% | ||
| Interest Coverage | 4.69 | ||
| Cash Conversion | 79.03% | ||
| Profit Quality | 329.33% | ||
| Current Ratio | 1.17 | ||
| Quick Ratio | 1.07 | ||
| Altman-Z | 7.55 |
F-Score5
WACC14.61%
ROIC/WACC0.54
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 Y31.79%
EPS Next 2Y25.25%
EPS Next 3Y22.5%
EPS Next 5Y24.06%
Revenue 1Y (TTM)43.99%
Revenue growth 3Y23.39%
Revenue growth 5Y17.94%
Sales Q2Q%51.2%
Revenue Next Year18.67%
Revenue Next 2Y17.06%
Revenue Next 3Y15.99%
Revenue Next 5Y18.03%
EBIT growth 1Y-7.32%
EBIT growth 3Y20.65%
EBIT growth 5Y29.07%
EBIT Next Year38.24%
EBIT Next 3Y23.83%
EBIT Next 5Y22.68%
FCF growth 1Y10.1%
FCF growth 3Y13.38%
FCF growth 5Y15.95%
OCF growth 1Y10.38%
OCF growth 3Y13.19%
OCF growth 5Y15.53%