BROADCOM INC (AVGO) Stock Fundamental Analysis
USA - NASDAQ:AVGO - US11135F1012 - Common Stock
362.05 USD
+7.92 (+2.24%)
363.52 USD
+1.47 (+0.41%)
AVGO gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 112 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 growing strongly while it is still valued neutral. This is a good combination! These ratings could make AVGO a good candidate 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.
Each year in the past 5 years AVGO has been profitable.
Each year in the past 5 years AVGO had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 11.43%, AVGO belongs to the top of the industry, outperforming 82.14% of the companies in the same industry.
Looking at the Return On Equity, with a value of 25.84%, AVGO belongs to the top of the industry, outperforming 90.18% of the companies in the same industry.
With an excellent Return On Invested Capital value of 12.26%, AVGO belongs to the best of the industry, outperforming 84.82% 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 11.03%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.43% | ||
| ROE | 25.84% | ||
| ROIC | 12.26% |
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 an excellent Profit Margin value of 31.59%, AVGO belongs to the best of the industry, outperforming 91.96% of the companies in the same industry.
In the last couple of years the Profit Margin of AVGO has remained more or less at the same level.
The Operating Margin of AVGO (39.20%) is better than 96.43% of its industry peers.
In the last couple of years the Operating Margin of AVGO has grown nicely.
The Gross Margin of AVGO (67.03%) is better than 90.18% of its industry peers.
In the last couple of years the Gross Margin of AVGO has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 39.2% | ||
| PM (TTM) | 31.59% | ||
| GM | 67.03% |
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.
AVGO has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, AVGO has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 11.79 indicates that AVGO is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 11.79, AVGO is doing good in the industry, outperforming 75.89% of the companies in the same industry.
The Debt to FCF ratio of AVGO is 2.58, which is a good value as it means it would take AVGO, 2.58 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of AVGO (2.58) is better than 66.96% of its industry peers.
AVGO has a Debt/Equity ratio of 0.86. This is a neutral value indicating AVGO is somewhat dependend on debt financing.
AVGO has a worse Debt to Equity ratio (0.86) than 82.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | 2.58 | ||
| Altman-Z | 11.79 |
ROIC/WACC1.05
WACC11.64%
2.3 Liquidity
A Current Ratio of 1.50 indicates that AVGO should not have too much problems paying its short term obligations.
AVGO has a worse Current ratio (1.50) than 83.04% of its industry peers.
AVGO has a Quick Ratio of 1.37. This is a normal value and indicates that AVGO is financially healthy and should not expect problems in meeting its short term obligations.
AVGO has a Quick ratio of 1.37. This is in the lower half of the industry: AVGO underperforms 76.79% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.5 | ||
| Quick Ratio | 1.37 |
3. Growth
3.1 Past
AVGO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 38.52%, which is quite impressive.
AVGO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 17.90% yearly.
Looking at the last year, AVGO shows a very strong growth in Revenue. The Revenue has grown by 28.01%.
The Revenue has been growing by 17.94% on average over the past years. This is quite good.
EPS 1Y (TTM)38.52%
EPS 3Y20.14%
EPS 5Y17.9%
EPS Q2Q%36.29%
Revenue 1Y (TTM)28.01%
Revenue growth 3Y23.39%
Revenue growth 5Y17.94%
Sales Q2Q%22.03%
3.2 Future
The Earnings Per Share is expected to grow by 33.02% on average over the next years. This is a very strong growth
Based on estimates for the next years, AVGO will show a very strong growth in Revenue. The Revenue will grow by 24.71% on average per year.
EPS Next Y40.21%
EPS Next 2Y39.49%
EPS Next 3Y36.83%
EPS Next 5Y33.02%
Revenue Next Year22.86%
Revenue Next 2Y29.36%
Revenue Next 3Y29.55%
Revenue Next 5Y24.71%
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 57.56, the valuation of AVGO can be described as expensive.
AVGO's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.08, AVGO is valued quite expensively.
A Price/Forward Earnings ratio of 38.33 indicates a quite expensive valuation of AVGO.
The rest of the industry has a similar Price/Forward Earnings ratio as AVGO.
AVGO is valuated expensively when we compare the Price/Forward Earnings ratio to 23.09, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.56 | ||
| Fwd PE | 38.33 |
4.2 Price Multiples
AVGO's Enterprise Value to EBITDA ratio is in line with the industry average.
AVGO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. AVGO is cheaper than 60.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 68.58 | ||
| EV/EBITDA | 52.87 |
4.3 Compensation for Growth
AVGO's 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.
AVGO's earnings are expected to grow with 36.83% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.43
PEG (5Y)3.22
EPS Next 2Y39.49%
EPS Next 3Y36.83%
5. Dividend
5.1 Amount
With a yearly dividend of 0.69%, AVGO is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.18, AVGO pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.30, AVGO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.69% |
5.2 History
On average, the dividend of AVGO grows each year by 16.17%, which is quite nice.
AVGO has paid a dividend for at least 10 years, which is 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 Years14
Div Non Decr Years14
5.3 Sustainability
57.20% of the earnings are spent on dividend by AVGO. This is a bit on the high side, but may be sustainable.
The dividend of AVGO is growing, but earnings are growing more, so the dividend growth is sustainable.
DP57.2%
EPS Next 2Y39.49%
EPS Next 3Y36.83%
362.05
+7.92 (+2.24%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners79.37%
Inst Owner Change-0.03%
Ins Owners1.93%
Ins Owner Change-23.89%
Market Cap1709.73B
Revenue(TTM)59.93B
Net Income(TTM)18.93B
Analysts84.53
Price Target369.19 (1.97%)
Short Float %1.14%
Short Ratio2.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.69% |
Yearly Dividend2.22
Dividend Growth(5Y)16.17%
DP57.2%
Div Incr Years14
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.21%
Min EPS beat(2)-0.93%
Max EPS beat(2)0.5%
EPS beat(4)3
Avg EPS beat(4)1.44%
Min EPS beat(4)-0.93%
Max EPS beat(4)5.39%
EPS beat(8)5
Avg EPS beat(8)1.17%
EPS beat(12)7
Avg EPS beat(12)0.73%
EPS beat(16)9
Avg EPS beat(16)0.71%
Revenue beat(2)0
Avg Revenue beat(2)-1.53%
Min Revenue beat(2)-1.89%
Max Revenue beat(2)-1.17%
Revenue beat(4)1
Avg Revenue beat(4)-1.3%
Min Revenue beat(4)-2.22%
Max Revenue beat(4)0.09%
Revenue beat(8)3
Avg Revenue beat(8)-0.95%
Revenue beat(12)3
Avg Revenue beat(12)-1.21%
Revenue beat(16)4
Avg Revenue beat(16)-1.06%
PT rev (1m)2.22%
PT rev (3m)25.25%
EPS NQ rev (1m)1.54%
EPS NQ rev (3m)3.77%
EPS NY rev (1m)0.31%
EPS NY rev (3m)1.27%
Revenue NQ rev (1m)0.48%
Revenue NQ rev (3m)2.98%
Revenue NY rev (1m)0.18%
Revenue NY rev (3m)0.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.56 | ||
| Fwd PE | 38.33 | ||
| P/S | 28.53 | ||
| P/FCF | 68.58 | ||
| P/OCF | 67.21 | ||
| P/B | 23.33 | ||
| P/tB | N/A | ||
| EV/EBITDA | 52.87 |
EPS(TTM)6.29
EY1.74%
EPS(NY)9.45
Fwd EY2.61%
FCF(TTM)5.28
FCFY1.46%
OCF(TTM)5.39
OCFY1.49%
SpS12.69
BVpS15.52
TBVpS-12.47
PEG (NY)1.43
PEG (5Y)3.22
Graham Number46.86
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.43% | ||
| ROE | 25.84% | ||
| ROCE | 15.78% | ||
| ROIC | 12.26% | ||
| ROICexc | 13.21% | ||
| ROICexgc | 301.66% | ||
| OM | 39.2% | ||
| PM (TTM) | 31.59% | ||
| GM | 67.03% | ||
| FCFM | 41.6% |
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%
ROICexgc growth 3Y52.32%
ROICexgc 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-Score9
Asset Turnover0.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | 2.58 | ||
| Debt/EBITDA | 1.92 | ||
| Cap/Depr | 5.55% | ||
| Cap/Sales | 0.85% | ||
| Interest Coverage | 8.67 | ||
| Cash Conversion | 77.92% | ||
| Profit Quality | 131.68% | ||
| Current Ratio | 1.5 | ||
| Quick Ratio | 1.37 | ||
| Altman-Z | 11.79 |
F-Score9
WACC11.64%
ROIC/WACC1.05
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)38.52%
EPS 3Y20.14%
EPS 5Y17.9%
EPS Q2Q%36.29%
EPS Next Y40.21%
EPS Next 2Y39.49%
EPS Next 3Y36.83%
EPS Next 5Y33.02%
Revenue 1Y (TTM)28.01%
Revenue growth 3Y23.39%
Revenue growth 5Y17.94%
Sales Q2Q%22.03%
Revenue Next Year22.86%
Revenue Next 2Y29.36%
Revenue Next 3Y29.55%
Revenue Next 5Y24.71%
EBIT growth 1Y61.92%
EBIT growth 3Y20.65%
EBIT growth 5Y29.07%
EBIT Next Year44.66%
EBIT Next 3Y32.44%
EBIT Next 5Y30.88%
FCF growth 1Y43.52%
FCF growth 3Y13.38%
FCF growth 5Y15.95%
OCF growth 1Y42.59%
OCF growth 3Y13.19%
OCF growth 5Y15.53%
BROADCOM INC / AVGO FAQ
Can you provide the ChartMill fundamental rating for BROADCOM INC?
ChartMill assigns a fundamental rating of 7 / 10 to AVGO.
What is the valuation status for AVGO stock?
ChartMill assigns a valuation rating of 4 / 10 to BROADCOM INC (AVGO). This can be considered as Fairly Valued.
What is the profitability of AVGO stock?
BROADCOM INC (AVGO) has a profitability rating of 9 / 10.
Can you provide the financial health for AVGO stock?
The financial health rating of BROADCOM INC (AVGO) is 5 / 10.
What is the earnings growth outlook for BROADCOM INC?
The Earnings per Share (EPS) of BROADCOM INC (AVGO) is expected to grow by 40.21% in the next year.