Broadcom Stock Analysis (NASDAQ:AVGO)

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$223.2 $1.96 (0.89%) AVGO stock closing price Apr 25, 2017 (Closing)
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Broadcom
Updated on : Apr 25, 2017
previous close
AVGO 223.2 (0%)
NASDAQ 6025.5 (0%)
Closing Price On: Apr 25, 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:
5.3%
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:
1.13%
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 :
5.7
Industry PS :
2.7
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 (2.7/5)

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?

  • The Year Over Year (YoY) revenue growth for Broadcom was 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.
  • The price to earnings multiple of 20.7 is attractive when compared with the industry average PE ratio of 26.1.
  • The company has a good Free Cash Flow (FCF) margin of 24.8%.

Should you sell AVGO stock?

  • Broadcom reported an average operating margin of -2.4% over the Last Twelve Months (LTM).
  • Over the last 12 months, Broadcom had an average Net loss of -12%.
  • With a debt/equity ratio of  0.62, Broadcom is highly leveraged in comparison to Computer and Technology peers.
  • AVGO stock is trading at a PS multiple of 5.7, which is a negative when compared to the Electronics-Semiconductors industry average multiple of 2.7.
  • The company has a negative Return on Invested Capital of -0.7%, which is a red flag.
  • A negative ROE of -10% indicates that the company is not able to generate profits with the money shareholders have invested.

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