Broadcom Stock Analysis, Valuation (NASDAQ:AVGO)

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$248.62 $1 (0.4%) AVGO stock closing price Feb 21, 2018 (Closing)
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Broadcom
Updated on : Feb 21, 2018
previous close
AVGO 248.6 (0%)
NASDAQ 7218.2 (0%)
Closing Price On: Feb 21, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Electronics-Semiconductors
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2017-Q4
$billion
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
49.5%
Operating Profit
Operating Margin:
13.5%
Sector Average:
5.3%
5 Quarter Net Profit
Net Margins
2017-Q4
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
17.55B
Debt/Equity Ratio:
 0.76
Compared to the industry
Cash Flow
Operating cash flow:
$1.96B
Net Income:
$636M
Dividend Yield
AVGO dividend yield:
1.64%
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 :
2.8
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
5.5%
Return on Equity:
8%
Free Cash Flow Margin:
44.7%
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Broadcom Stock Analysis

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Investors can watch the Amigobulls Broadcom stock analysis video here. Our analyst opinion covering the buy and sell arguments for AVGO stock is shown in the video.

Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.

Broadcom Ltd Stock Rating 3.9/5

Amigobulls AVGO stock analysis uses latest quarter 2017 Q4 financial data like Broadcom revenue growth, profit margins and cash flows. We also use relative valuation metrics like PE ratio and price to sales ratio for Broadcom valuation analysis. Broadcom stock rating encapsulates our opinion about the company based on the fundamentals.

Should you buy AVGO stock?

  • The Year Over Year (YoY) revenue growth for Broadcom was 17.1% in 2017 Q4.
  • Revenue growth has been tremendous with a compounded annual growth of 49.5% over the last 5 years.
  • Broadcom had a healthy average operating margin of 13.5% over the last 4 quarters.
  • Net margins stood at a healthy 10.2% (average) for Broadcom in the Trailing Twelve Months.
  • The company has an operating cash flow which is 3.1 times the net income. We see this as a positive signal.
  • AVGO stock is trading at an earnings multiple of 17.3 which is better than the industry average of 25.3.
  • The company has a good Free Cash Flow (FCF) margin of 44.7%.

Should you sell AVGO stock?

  • Broadcom is debt laden and has a high debt/equity ratio of  0.76.
  • The company is trading at a price to sales multiple of 5.8, which is higher in comparison to the Electronics-Semiconductors industry average of 2.8, making AVGO stock expensive.

Comments on this video and Broadcom stock

Investors can make use of the Amigobulls Broadcom stock analysis to ascertain how AVGO stock fares in fundamental analysis investment criteria. Fundamentals of a company give detailed information which helps in making invesment decisions.

Broadcom revenue growth and profit or net income are the main underlying forces which could detremine the direction of the share price. Technical analysis comes in handy to check whether the market sentiment is in line with the fundamental picture of the company.