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Broadcom Inc AVGO

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Stock XNAS Rating as of
$1,238.57 −4.29 (0.35%)
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Company Report

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Broadcom Is Quickly Becoming an AI Powerhouse, but It Remains a Wide-Moat Diversified Aggregator

William Kerwin

Broadcom is an amalgamation of high-value chip and software businesses that on the whole are differentiated and moaty, in our view. Broadcom is a terrific aggregator of firms, big and small. Its ability to acquire and streamline generates strong profits and cash flow, and fuels its robust dividend. We laud the firm for its execution and operating efficiency, which build upon its large organic investment and help it to outperform its end markets organically.

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Price vs Fair Value

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AVGO is trading at a 14% premium.
Price
$1,242.86
Fair Value
$4,485.00
Uncertainty
Medium
1-Star Price
$1,824.20
5-Star Price
$313.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Broadcom is a poster child for operating efficiency. It earns excellent operating margins and generates enormous cash flow. It is particularly strong at acquiring companies and trimming excess expenses.

Bears

Broadcom has sizable exposure to nonmoaty businesses, in our view, like its broadband and storage chips.

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Trading Information

Previous Close Price
$1,242.86
Day Range
$1,223.31–1,264.45
52-Week Range
$601.29–1,438.17
Bid/Ask
$1,241.00 / $1,251.00
Market Cap
$573.98 Bil
Volume/Avg
2.9 Mil / 3.0 Mil

Key Statistics

Price/Earnings (Normalized)
28.96
Price/Sales
13.96
Dividend Yield (Trailing)
1.59%
Dividend Yield (Forward)
1.69%
Total Yield
4.07%

Company Profile

Broadcom is the sixth-largest semiconductor company globally and has expanded into various software businesses, with over $30 billion in annual revenue. It sells 17 core semiconductor product lines across wireless, networking, broadband, storage, and industrial markets. It is primarily a fabless designer but holds some manufacturing in-house, like for its best-of-breed FBAR filters that sell into the Apple iPhone. In software, it sells virtualization, infrastructure, and security software to large enterprises, financial institutions, and governments.Broadcom is the product of consolidation. Its businesses are an amalgamation of former companies like legacy Broadcom and Avago Technologies in chips, as well as Brocade, CA Technologies, and Symantec in software.
Sector
Technology
Industry
Semiconductors
Stock Style Box
Large Growth
Total Number of Employees
20,000
Website
https://www.broadcom.com

Competitors

Valuation

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Metric
AVGO
SWKS
MRVL
Price/Earnings (Normalized)
 28.9612.1242.29
Price/Book Value
 8.282.283.72
Price/Sales
 13.963.209.98
Price/Cash Flow
 26.849.5241.87
Price/Earnings
AVGO
SWKS
MRVL

Financial Strength

Metric
AVGO
SWKS
MRVL
Quick Ratio
 0.833.021.14
Current Ratio
 1.335.191.69
Interest Coverage
 6.6320.98−2.63
Quick Ratio
AVGO
SWKS
MRVL

Profitability

Metric
AVGO
SWKS
MRVL
Return on Assets (Normalized)
 20.50%14.16%5.98%
Return on Equity (Normalized)
 59.22%19.76%8.55%
Return on Invested Capital (Normalized)
 26.13%16.25%7.39%
Return on Assets
AVGO
SWKS
MRVL
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