Broadcom Stock Analysis, Valuation (NASDAQ:AVGO)
Broadcom Stock Analysis
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.