Broadcom Stock Analysis (NASDAQ:AVGO)

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$216.86 $0.56 (0.26%) AVGO stock closing price Mar 23, 2017 (Closing)
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Broadcom
Updated on : Mar 23, 2017
previous close
AVGO 216.9 (0%)
NASDAQ 5817.7 (0%)
Closing Price On: Mar 23, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Electronics-Semiconductors
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2017-Q1
$billion
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
46%
Operating Profit
Operating Margin:
-2.4%
Sector Average:
2.7%
5 Quarter Net Profit
Net Margins
2017-Q1
%
LTM Margin
Debt/Equity Ratio
Debt:
13.56B
Debt/Equity Ratio:
 0.62
Compared to the industry
Cash Flow
Operating cash flow:
$1.35B
Net Income:
$239M
Dividend Yield
AVGO dividend yield:
1.16%
PROS      CONS
Recent Growth
Long Term Growth
Cash Flow
FCF Margin
PE Valuation
Operating Margins
Net Margins
High Debt Burden
ROIC
ROE
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
AVGO PS :
5.5
Industry PS :
2.6
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
-0.7%
Return on Equity:
-10%
Free Cash Flow Margin:
24.8%
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Broadcom Analysis Video

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View Broadcom stock analysis video. This is our AVGO analyst opinion covering the buy and sell arguments for AVGO stock.

Broadcom Ltd Stock Rating (2.8/5)

Our Broadcom stock opinion is based on fundamentals of the company. This Broadcom stock analysis is based on latest Q1 earnings for 2017. The stock price analysis takes into account a company's valuation metrics.

Should you buy AVGO stock?

  • Broadcom's revenue growth came in at 133.7% in 2017 Q1.
  • Long term revenue growth has been strong with a 5 year compounded annual growth of 46%.
  • The company has an operating cash flow which is 5.7 times the net income. We see this as a positive signal.
  • AVGO stock is trading at an earnings multiple of 20.1 which is better than the industry average of 25.8.
  • The company has a healthy free cash flow margin of 24.8%.

Should you sell AVGO stock?

  • Broadcom reported an average operating margin of -2.4% over the Last Twelve Months (LTM).
  • Broadcom registered an average TTM Net loss of -12%.
  • Broadcom is debt laden and has a high debt/equity ratio of  0.62.
  • The company is trading at a price to sales multiple of 5.5, which is overvalued in comparison to the Electronics-Semiconductors industry average multiple of 2.6.
  • The company has a negative Return on Invested Capital of -0.7%, which is a red flag.
  • Broadcom has a negative ROE (Return On Equity) of -10%, indicating the company is not profitable.

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