NasdaqGS:AVGO

Stock Analysis Report

Executive Summary

Broadcom Inc. designs, develops, and supplies a range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide.

Snowflake

Fundamentals

Reasonable growth potential with adequate balance sheet.


Similar Companies

Share Price & News

How has Broadcom's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AVGO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.6%

AVGO

1.0%

US Semiconductor

0.4%

US Market


1 Year Return

32.7%

AVGO

35.1%

US Semiconductor

13.1%

US Market

Return vs Industry: AVGO underperformed the US Semiconductor industry which returned 35.1% over the past year.

Return vs Market: AVGO exceeded the US Market which returned 13.1% over the past year.


Shareholder returns

AVGOIndustryMarket
7 Day0.6%1.0%0.4%
30 Day8.0%8.5%4.0%
90 Day14.6%18.7%7.4%
1 Year37.9%32.7%37.7%35.1%15.6%13.1%
3 Year104.4%87.8%89.7%78.9%48.2%38.6%
5 Year289.2%248.8%143.8%119.2%62.6%44.6%

Price Volatility Vs. Market

How volatile is Broadcom's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Broadcom undervalued compared to its fair value and its price relative to the market?

23.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AVGO ($313.67) is trading below our estimate of fair value ($410.05)

Significantly Below Fair Value: AVGO is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: AVGO is poor value based on its PE Ratio (42x) compared to the Semiconductor industry average (30.6x).

PE vs Market: AVGO is poor value based on its PE Ratio (42x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: AVGO is poor value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: AVGO is overvalued based on its PB Ratio (5.8x) compared to the US Semiconductor industry average (2.9x).


Next Steps

Future Growth

How is Broadcom forecast to perform in the next 1 to 3 years based on estimates from 27 analysts?

40.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AVGO's forecast earnings growth (40.7% per year) is above the savings rate (2.7%).

Earnings vs Market: AVGO's earnings (40.7% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: AVGO's revenue (5.9% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: AVGO's revenue (5.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AVGO's Return on Equity is forecast to be very high in 3 years time (49.7%).


Next Steps

Past Performance

How has Broadcom performed over the past 5 years?

53.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AVGO has large one-off items impacting its financial results.

Growing Profit Margin: AVGO's current net profit margins (13.5%) are lower than last year (57.7%).


Past Earnings Growth Analysis

Earnings Trend: AVGO's earnings have grown significantly by 53.2% per year over the past 5 years.

Accelerating Growth: AVGO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: AVGO had negative earnings growth (-74.3%) over the past year, making it difficult to compare to the Semiconductor industry average (-10.4%).


Return on Equity

High ROE: AVGO's Return on Equity (14%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Broadcom's financial position?


Financial Position Analysis

Short Term Liabilities: AVGO's short term assets ($10.9B) exceeds its short term liabilities ($8.3B)

Long Term Liabilities: AVGO's short term assets (10.9B) do not cover its long term liabilities (40.0B)


Debt to Equity History and Analysis

Debt Level: AVGO's debt to equity ratio (174.7%) is considered high

Reducing Debt: AVGO's debt to equity ratio has reduced from 177.9% to 174.7% over the past 5 years.

Debt Coverage: AVGO's debt is well covered by operating cash flow (26.2%).

Interest Coverage: AVGO's interest payments on its debt are well covered by EBIT (4.4x coverage).


Balance Sheet

Inventory Level: AVGO has a low level of unsold assets or inventory.

Debt Coverage by Assets: AVGO's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

What is Broadcom's current dividend yield, its reliability and sustainability?

3.38%

Current Dividend Yield


Dividend Yield vs Market

company3.4%marketbottom25%1.4%markettop25%3.7%industryaverage2.0%forecastin3Years3.8%

Current dividend yield vs market & industry

Notable Dividend: AVGO's dividend (3.38%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: AVGO's dividend (3.38%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, AVGO has been paying a dividend for less than 10 years.

Growing Dividend: AVGO's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (141.9%), AVGO's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AVGO's dividends in 3 years are forecast to be well covered by earnings (46.3% payout ratio).


Next Steps

Management

What is the CEO of Broadcom's salary, the management and board of directors tenure and is there insider trading?

6.1yrs

Average management tenure


CEO

Hock Tan (67yo)

13.7yrs

Tenure

US$5,042,937

Compensation

Mr. Hock E. Tan is Broadcom President, Chief Executive Officer and Director. He has held this position since March 2006. From September 2005 to January 2008, he served as chairman of the board of Integrate ...


CEO Compensation Analysis

Compensation vs Market: Hock's total compensation ($USD5.04M) is below average for companies of similar size in the US market ($USD10.97M).

Compensation vs Earnings: Hock's compensation has been consistent with company performance over the past year.


Management Age and Tenure

6.1yrs

Average Tenure

54yo

Average Age

Experienced Management: AVGO's management team is seasoned and experienced (6.1 years average tenure).


Board Age and Tenure

0.9yrs

Average Tenure

60yo

Average Age

Experienced Board: AVGO's board of directors are not considered experienced ( 0.9 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: AVGO insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$560,00015 Oct 19
Mark Brazeal
EntityIndividual
Role
Chief Legal Officer
Chief Legal Officer
Shares2,000
Max PriceUS$280.00
SellUS$1,225,22403 Apr 19
Kirsten Spears
EntityIndividual
Role
Chief Accounting Officer
Chief Accounting Officer
Shares4,000
Max PriceUS$306.31
SellUS$4,282,30722 Mar 19
Thomas Krause
EntityIndividual
Role
Chief Financial Officer
CFO & Secretary
Shares14,494
Max PriceUS$298.00

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Hock Tan (67yo)

    CEO, President & Executive Director

    • Tenure: 13.7yrs
    • Compensation: US$5.04m
  • Tom Krause (41yo)

    CFO & Secretary

    • Tenure: 3.7yrs
    • Compensation: US$7.33m
  • Boon Ooi (65yo)

    Senior Vice President of Global Operations

    • Tenure: 10.8yrs
    • Compensation: US$4.93m
  • Bryan Ingram (54yo)

    Executive Officer

    • Tenure: 12yrs
    • Compensation: US$7.56m
  • Andy Nallappan

    VP of Global Information Technology & Chief Information Officer

    • Tenure: 7.8yrs
  • Charlie Kawwas (48yo)

    Senior VP & Chief Sales Officer

    • Tenure: 4.4yrs
    • Compensation: US$7.26m
  • Kirsten Spears (55yo)

    Chief Accounting Officer

    • Tenure: 3.7yrs
  • Mark Brazeal (51yo)

    Chief Legal Officer

    • Tenure: 2.7yrs
    • Compensation: US$5.82m
  • Debbie Streeter

    Vice President of Human Resources

    • Tenure: 0yrs
  • Beatrice Russotto

    Director of Investor Relations

    • Tenure: 0yrs

Board Members

  • Hock Tan (67yo)

    CEO, President & Executive Director

    • Tenure: 13.7yrs
    • Compensation: US$5.04m
  • Justine Page (56yo)

    Independent Director

    • Tenure: 0.4yrs
    • Compensation: US$60.50k
  • Eddy Hartenstein (68yo)

    Lead Independent Director

    • Tenure: 0.9yrs
    • Compensation: US$300.67k
  • Henry Samueli (64yo)

    Chairman of the Board

    • Tenure: 0.9yrs
    • Compensation: US$3.03m
  • Gayla Delly (59yo)

    Independent Director

    • Tenure: 1.9yrs
    • Compensation: US$347.64k
  • Harry You (60yo)

    Independent Director

    • Tenure: 0.8yrs
  • Peter Marks (66yo)

    Independent Director

    • Tenure: 5.9yrs
    • Compensation: US$284.17k
  • Check Kian Low (60yo)

    Independent Director

    • Tenure: 2.9yrs
    • Compensation: US$271.67k
  • Diane Bryant (57yo)

    Independent Director

    • Tenure: 0.8yrs

Company Information

Broadcom Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Broadcom Inc.
  • Ticker: AVGO
  • Exchange: NasdaqGS
  • Founded: 2005
  • Industry: Semiconductors
  • Sector: Semiconductors
  • Market Cap: US$124.424b
  • Shares outstanding: 396.67m
  • Website: https://www.broadcom.com

Number of Employees


Location

  • Broadcom Inc.
  • 1320 Ridder Park Drive
  • San Jose
  • California
  • 95131
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
0YXGLSE (London Stock Exchange)YesCommon StockGBUSDAug 2009
1YDDB (Deutsche Boerse AG)YesCommon StockDEEURAug 2009
AVGO *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNAug 2009
BROAWBAG (Wiener Boerse AG)YesCommon StockATEURAug 2009
AVGONasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDAug 2009
AVGO34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REP 0.2 COM USD0.001BRBRLMay 2019
AVGO.PNasdaqGS (Nasdaq Global Select)8% CNV PFD SER AUSUSDSep 2019

Biography

Broadcom Inc. designs, develops, and supplies a range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/14 00:49
End of Day Share Price2019/11/13 00:00
Earnings2019/08/04
Annual Earnings2018/11/04


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.