Broadcom Inc.AVGO
NMS • Technology
$364.03
P/E
58.81
PEG
0.67
FCF Yield
1.6%
Rev Growth YoY
+47.9% YoY
Gross Margin
69.5%
Health Score
8/10
D/E Ratio
0.74
Confidence
MEDIUM
Business Snapshot
Broadcom Inc. operates as a leading designer and developer of semiconductor and infrastructure software solutions, serving enterprise customers across data centers, networking, and wireless markets. The company is a dominant player in the semiconductor industry, particularly within custom AI accelerators and networking chips, competing alongside a handful of large-cap peers. With a market capitalisation of $1.73T and TTM revenue of $75.47B, Broadcom sits firmly in the mega-cap tier and ranks among the largest semiconductor companies globally. The company's defining characteristic is its extraordinary profitability — a 69.5% gross margin and 38.9% net margin place it among the most efficiently run businesses in the sector.
Financial Health
Gross margin stands at 69.5%, improving from 68.1% in the prior year, while net margin is a robust 38.9% on TTM net income of $29.32B. The balance sheet is healthy but not fortress-like, with a debt/equity ratio of 0.74x and a current ratio of 2.24x, indicating solid liquidity coverage and manageable leverage for a capital-intensive business...
Risk Assessment
- VALUATION — P/E of 58.81x represents a premium of over 50% to the sector average of 38.3x, leaving limited margin for error. VALUATION DIVERGENCE — The Python DCF estimate of $196.84 sits 84.9% below the current price of $364.03, indicating the market is pricing in growth far beyond model assumptions...
Gross margin stands at 69.5%, improving from 68.1% in the prior year, while net margin is a robust 38.9% on TTM net income of $29.32B. The balance sheet is healthy but not fortress-like, with a debt/equity ratio of 0.74x and a current ratio of 2.24x, indicating solid liquidity coverage and manageable leverage for a capital-intensive business. Free cash flow is strongly positive at $26.91B, though the FCF yield of 1.6% reflects the market already pricing in substantial future growth. Return on equity is exceptional at 37.3%, demonstrating highly efficient capital deployment. Overall, Broadcom's financial profile supports continued reinvestment in AI infrastructure, potential dividend growth, and a low risk of equity dilution, though the modest FCF yield suggests the market is paying up for this quality.
- VALUATION — P/E of 58.81x represents a premium of over 50% to the sector average of 38.3x, leaving limited margin for error. VALUATION DIVERGENCE — The Python DCF estimate of $196.84 sits 84.9% below the current price of $364.03, indicating the market is pricing in growth far beyond model assumptions. TECHNICALS — Price is trading below the 200-day moving average of $369.2, confirming an established downtrend despite the golden cross signal. INSIDER — 8 insider sells versus 0 buys over the last 90 days indicates management is trimming positions at current levels. 52-WEEK POSITION — At $364.03, the stock trades 26.5% below its 52-week high of $495.0 and above the midpoint of the range, reflecting significant drawdown from peak levels. EARNINGS QUALITY — The company beat analyst estimates in only 2 of the last 4 quarters, signalling guidance credibility that is inconsistent.
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