Broadcom Stock Analysis (NASDAQ:AVGO)

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$253.03 $0.08 (0.03%) AVGO stock closing price Jul 24, 2017 (Closing)
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Broadcom
Updated on : Jul 21, 2017
previous close
AVGO 253.1 (0%)
NASDAQ 6387.8 (0%)
Closing Price On: Jul 21, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Electronics-Semiconductors
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2017-Q2
$billion
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
47%
Operating Profit
Operating Margin:
6.8%
Sector Average:
6%
5 Quarter Net Profit
Net Margins
2017-Q2
%
LTM Margin
Debt/Equity Ratio
Debt:
13.57B
Debt/Equity Ratio:
 0.61
Compared to the industry
Cash Flow
Operating cash flow:
$1.58B
Net Income:
$440M
Dividend Yield
AVGO dividend yield:
1.21%
PROS      CONS
Recent Growth
Long Term Growth
Cash Flow
FCF Margin
PE Valuation
Net Margins
High Debt Burden
ROIC
ROE
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
AVGO PS :
6.3
Industry PS :
2.8
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
-1%
Return on Equity:
-1.1%
Free Cash Flow Margin:
31.7%
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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 (3/5)

Our Broadcom stock opinion is based on fundamentals of the company. This Broadcom stock analysis is based on latest Q2 earnings for 2017. The stock price analysis takes into account a company's valuation metrics.

Should you buy AVGO stock?

  • Broadcom sales grew by 18.3% year on year in 2017 Q2.
  • Revenue growth has been tremendous with a compounded annual growth of 47% over the last 5 years.
  • The company has an operating cash flow which is 3.6 times the net income.
  • The price to earnings multiple of 21.1 is attractive when compared with the industry average PE ratio of 26.4.
  • Broadcom has a healthy FCF (Free Cash Flow) margin of 31.7%.

Should you sell AVGO stock?

  • Over the last 12 months, Broadcom had an average Net loss of -1.5%.
  • Broadcom has a debt/equity ratio of  0.61, which is worse than the average in the Computer and Technology sector.
  • The company is trading at a price to sales multiple of 6.3, which is higher in comparison to the Electronics-Semiconductors industry average of 2.8, making AVGO stock expensive.
  • Broadcom's negative ROIC of -1% indicates operational inefficiency.
  • Broadcom has a negative return on equity of -1.1%. This indicates that the firm is inefficient at generating profits.

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