Broadcom Stock Analysis, Valuation (NASDAQ:AVGO)

Add to My Stocks
$242.91 $6.85 (2.74%) AVGO stock closing price Sep 20, 2017 (Closing)
Watch Robo Advisor Video of AVGO Stock Analysis
Broadcom
Updated on : Sep 20, 2017
previous close
AVGO 242.9 (0%)
NASDAQ 6456 (0%)
Closing Price On: Sep 20, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Electronics-Semiconductors
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2017-Q3
$billion
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
48.2%
Operating Profit
Operating Margin:
11.9%
Sector Average:
5.8%
5 Quarter Net Profit
Net Margins
2017-Q3
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
13.57B
Debt/Equity Ratio:
 0.6
Compared to the industry
Cash Flow
Operating cash flow:
$1.66B
Net Income:
$481M
Dividend Yield
AVGO dividend yield:
1.47%
PROS      CONS
Recent Growth
Long Term Growth
Operating Margins
Net Margins
Cash Flow
FCF Margin
High Debt Burden
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
AVGO PS :
5.8
Industry PS :
2.7
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
2%
Return on Equity:
2.4%
Free Cash Flow Margin:
31.4%
Double Tap To Exit Full Screen
0:00
/

Broadcom Stock Analysis

892 8 2

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

Broadcom Ltd Stock Rating 3.5/5

Our Broadcom stock opinion is based on fundamentals of the company. This Broadcom stock analysis is based on latest 2017 Q3 earnings. The stock price analysis takes into account the company's valuation metrics.

Should you buy AVGO stock?

  • Broadcom's revenue growth came in at 17.7% in 2017 Q3.
  • Revenue growth has been tremendous with a compounded annual growth of 48.2% over the last 5 years.
  • Broadcom's average operating margin of 11.9% was exceptional.
  • Net margins came in at average 3.1% for Broadcom over the last twelve months.
  • The company has an operating cash flow which is 3.4 times the net income. We see this as a positive signal.
  • The price to earnings multiple of 18.4 is attractive when compared with the industry average PE ratio of 26.2.
  • The company has a good Free Cash Flow (FCF) margin of 31.4%.

Should you sell AVGO stock?

  • Broadcom is debt laden and has a high debt/equity ratio of  0.6.
  • The company is trading at a price to sales multiple of 5.8, which is overvalued in comparison to the Electronics-Semiconductors industry average multiple of 2.7.

Comments on this video and Broadcom stock