Broadcom Inc. designs, develops, and supplies semiconductor infrastructure software solutions.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$506.00|
|52 Week High||US$343.48|
|52 Week Low||US$510.70|
|1 Month Change||7.90%|
|3 Month Change||9.17%|
|1 Year Change||40.66%|
|3 Year Change||103.95%|
|5 Year Change||203.63%|
|Change since IPO||3,027.32%|
Recent News & Updates
Is Broadcom Stock A Buy Or Sell After Q2 Earnings: It's Fairly Valued Right Now
Broadcom is a formidable semiconductor company that we consider as a true bellwether for the industry. Its business is so well integrated into the internet ecosystem, it should be considered a core holding for semiconductor investors. Despite the secular drivers underpinning the industry's growth, CEO Hock Tan warned of an impending supply glut from 2023. Investors are clearly reminded to take valuations in semiconductor stocks into account. We maintain our neutral rating for now. We will wait for the next retracement to consider adding Broadcom stock.
Is There Now An Opportunity In Broadcom Inc. (NASDAQ:AVGO)?
Let's talk about the popular Broadcom Inc. ( NASDAQ:AVGO ). The company's shares had a relatively subdued couple of...
Broadcom Is Fairly Valued
AVGO has lagged the market over the past six months, after massive gains. Continued rapid earnings growth is needed to justify the current price. The Wall Street consensus remains bullish, but expected price appreciation is modest. The market-implied outlook (derived from options prices) has improved since early in 2021, but does not justify a buy rating. I am maintaining my rating on AVGO at neutral.
Estimating The Fair Value Of Broadcom Inc. (NASDAQ:AVGO)
In this article we are going to estimate the intrinsic value of Broadcom Inc. ( NASDAQ:AVGO ) by taking the expected...
|AVGO||US Semiconductor||US Market|
Return vs Industry: AVGO underperformed the US Semiconductor industry which returned 54.7% over the past year.
Return vs Market: AVGO exceeded the US Market which returned 33.6% over the past year.
Stable Share Price: AVGO is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 2% a week.
Volatility Over Time: AVGO's weekly volatility (2%) has been stable over the past year.
About the Company
Broadcom Inc. designs, develops, and supplies semiconductor infrastructure software solutions. It offers semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company's infrastructure software solutions enable customers to plan, develop, automate, manage, and secure applications across mainframe, distributed, mobile, and cloud platforms.
Is Broadcom undervalued compared to its fair value and its price relative to the market?
Price to Earnings (PE) ratio
Share Price vs. Fair Value
Below Fair Value: AVGO ($506) is trading above our estimate of fair value ($421.84)
Significantly Below Fair Value: AVGO is trading above our estimate of fair value.
Price To Earnings Ratio
PE vs Industry: AVGO is poor value based on its PE Ratio (36.1x) compared to the US Semiconductor industry average (28.7x).
PE vs Market: AVGO is poor value based on its PE Ratio (36.1x) compared to the US market (17.8x).
Price to Earnings Growth Ratio
PEG Ratio: AVGO is poor value based on its PEG Ratio (2.9x)
Price to Book Ratio
PB vs Industry: AVGO is overvalued based on its PB Ratio (8.6x) compared to the US Semiconductor industry average (4.6x).
How is Broadcom forecast to perform in the next 1 to 3 years based on estimates from 28 analysts?
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: AVGO's forecast earnings growth (12.5% per year) is above the savings rate (2%).
Earnings vs Market: AVGO's earnings (12.5% per year) are forecast to grow slower than the US market (14.8% per year).
High Growth Earnings: AVGO's earnings are forecast to grow, but not significantly.
Revenue vs Market: AVGO's revenue (5.3% per year) is forecast to grow slower than the US market (9.7% per year).
High Growth Revenue: AVGO's revenue (5.3% 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 (45.8%).
How has Broadcom performed over the past 5 years?
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: AVGO has high quality earnings.
Growing Profit Margin: AVGO's current net profit margins (21.8%) are higher than last year (9.6%).
Past Earnings Growth Analysis
Earnings Trend: AVGO has become profitable over the past 5 years, growing earnings by 15.4% per year.
Accelerating Growth: AVGO's earnings growth over the past year (158.5%) exceeds its 5-year average (15.4% per year).
Earnings vs Industry: AVGO earnings growth over the past year (158.5%) exceeded the Semiconductor industry 70.6%.
Return on Equity
High ROE: Whilst AVGO's Return on Equity (24.91%) is high, this metric is skewed due to their high level of debt.
How is Broadcom's financial position?
Financial Position Analysis
Short Term Liabilities: AVGO's short term assets ($15.6B) exceed its short term liabilities ($6.5B).
Long Term Liabilities: AVGO's short term assets ($15.6B) do not cover its long term liabilities ($45.0B).
Debt to Equity History and Analysis
Debt Level: AVGO's debt to equity ratio (165.8%) is considered high.
Reducing Debt: AVGO's debt to equity ratio has increased from 61% to 165.8% over the past 5 years.
Debt Coverage: AVGO's debt is well covered by operating cash flow (33.6%).
Interest Coverage: AVGO's interest payments on its debt are well covered by EBIT (4.2x coverage).
What is Broadcom current dividend yield, its reliability and sustainability?
Current Dividend Yield
Upcoming Dividend Payment
Dividend Yield vs Market
Notable Dividend: AVGO's dividend (2.85%) is higher than the bottom 25% of dividend payers in the US market (1.34%).
High Dividend: AVGO's dividend (2.85%) is low compared to the top 25% of dividend payers in the US market (3.6%).
Stability and Growth of Payments
Stable Dividend: AVGO's dividends per share have been stable in the past 10 years.
Growing Dividend: AVGO's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Dividend Coverage: With its high payout ratio (101.8%), AVGO's dividend payments are not well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: AVGO's dividends in 3 years are forecast to be covered by earnings (50.2% payout ratio).
How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Hock Tan (69 yo)
Mr. Hock E. Tan has been President, Chief Executive Officer and Director at Broadcom Inc. since March 2006. Mr. Tan is President, Chief Executive Officer and Director at Broadcom Corporation and Broadcom T...
CEO Compensation Analysis
Compensation vs Market: Hock's total compensation ($USD3.70M) is below average for companies of similar size in the US market ($USD11.33M).
Compensation vs Earnings: Hock's compensation has increased by more than 20% in the past year.
Experienced Management: AVGO's management team is considered experienced (3.1 years average tenure).
Experienced Board: AVGO's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: AVGO insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Broadcom Inc.'s employee growth, exchange listings and data sources
- Name: Broadcom Inc.
- Ticker: AVGO
- Exchange: NasdaqGS
- Founded: 2018
- Industry: Semiconductors
- Sector: Semiconductors
- Market Cap: US$208.278b
- Shares outstanding: 411.62m
- Website: https://www.broadcom.com
Number of Employees
- Broadcom Inc.
- 1320 Ridder Park Drive
- San Jose
- United States
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2021/09/18 00:51|
|End of Day Share Price||2021/09/17 00:00|
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.