Investors seeking growth at a reasonable cost should explore NASDAQ:AVGO.

Uncover the potential of BROADCOM INC (NASDAQ:AVGO), a growth stock that our stock screener found to be reasonably priced. NASDAQ:AVGO is excelling in growth aspects, maintaining a healthy financial position, and still offers an attractive valuation. We'll examine each aspect in detail.

A Closer Look at Growth for NASDAQ:AVGO

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:AVGO scores a 8 out of 10:

• 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.
• The Earnings Per Share has been growing by 17.90% on average over the past years. This is quite good.
• Looking at the last year, AVGO shows a very strong growth in Revenue. The Revenue has grown by 43.99%.
• 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.
• The Earnings Per Share is expected to grow by 24.06% on average over the next years. This is a very strong growth
• Based on estimates for the next years, AVGO will show a quite strong growth in Revenue. The Revenue will grow by 18.03% on average per year.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

Exploring NASDAQ:AVGO's Valuation

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NASDAQ:AVGO scores a 5 out of 10:

• The average S&P500 Price/Forward Earnings ratio is at 91.29. AVGO is valued rather cheaply when compared to this.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of AVGO indicates a somewhat cheap valuation: AVGO is cheaper than 67.59% of the companies listed in the same industry.
• 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.

What does the Health looks like for NASDAQ:AVGO

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:AVGO was assigned a score of 5 for health:

• An Altman-Z score of 6.56 indicates that AVGO is not in any danger for bankruptcy at the moment.
• AVGO has a better Altman-Z score (6.56) than 67.59% 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 better Debt to FCF ratio (3.48) than 65.74% of its industry peers.

Understanding NASDAQ:AVGO's Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:AVGO, the assigned 8 is noteworthy for profitability:

• AVGO has a Return On Equity of 8.71%. This is in the better half of the industry: AVGO outperforms 62.04% of its industry peers.
• AVGO has a better Return On Invested Capital (7.96%) than 74.07% of its industry peers.
• AVGO had an Average Return On Invested Capital over the past 3 years of 14.76%. This is above the industry average of 11.92%.
• 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.
• 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.
• With an excellent Operating Margin value of 29.57%, AVGO belongs to the best of the industry, outperforming 91.67% of the companies in the same industry.
• 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.

More Affordable Growth stocks can be found in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of AVGO

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.