Broadcom Inc.AVGO
NMS • Technology
$370.82
P/E
59.91
PEG
0.68
FCF Yield
1.5%
Rev Growth YoY
+47.9% YoY
Gross Margin
69.5%
Health Score
8/10
D/E Ratio
0.74
Confidence
MEDIUM
Business Snapshot
Broadcom is a global technology company that designs, develops, and supplies semiconductor and infrastructure software solutions, with its primary revenue generated from networking, storage, broadband, and wireless connectivity products alongside its enterprise software portfolio. It operates in the highly competitive semiconductor industry, holding a dominant position in key connectivity and custom AI chip markets, leveraging its scale and intellectual property to compete effectively. As a large-cap company with a market capitalisation of $1.76 trillion, Broadcom has achieved substantial financial scale, generating $75.47 billion in trailing twelve-month (TTM) revenue. The company is set apart by its strong free cash flow generation and high gross margins, characteristics that afford it significant strategic flexibility for reinvestment and shareholder returns.
Financial Health
Gross margin stands at a robust 69.5%, a slight improvement from 68.1% in the prior year, while net margin is an impressive 38.9%, reflecting exceptional profitability and operating leverage. The balance sheet is healthy, with a low Debt/Equity ratio of 0.74x and a current ratio of 2.24x, indicating ample liquidity to cover short-term obligations...
Risk Assessment
- VALUATION — P/E of 59.91x is significantly above the sector average of 35x, indicating high expectations that could lead to share price volatility if growth slows.
- EARNINGS QUALITY — Only 2 of the last 4 quarterly earnings were beats, suggesting management's guidance may not consistently align with results.
- 52-WEEK POSITION — At $370.82, the stock is trading well below its 52-week high of $495.0, reflecting a notable pullback of over 25% from that peak.
- VALUATION DIVERGENCE — The average analyst price target of $524.51 implies a 41.4% upside, while the Python DCF estimate of $196.01 implies the stock is overvalued—this wide divergence creates valuation uncertainty.
- TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed....
Gross margin stands at a robust 69.5%, a slight improvement from 68.1% in the prior year, while net margin is an impressive 38.9%, reflecting exceptional profitability and operating leverage. The balance sheet is healthy, with a low Debt/Equity ratio of 0.74x and a current ratio of 2.24x, indicating ample liquidity to cover short-term obligations. Free cash flow is a powerful $26.91 billion, translating to a free cash flow yield of 1.5%, which, while modest, is on a very large capital base and confirms the company is a strong cash generator. This combination of high profitability, manageable leverage, and robust cash flow provides Broadcom with significant capacity for dividends, share buybacks, and debt reduction, pointing to a strong overall financial foundation for long-term investors.
- VALUATION — P/E of 59.91x is significantly above the sector average of 35x, indicating high expectations that could lead to share price volatility if growth slows. - EARNINGS QUALITY — Only 2 of the last 4 quarterly earnings were beats, suggesting management's guidance may not consistently align with results. - 52-WEEK POSITION — At $370.82, the stock is trading well below its 52-week high of $495.0, reflecting a notable pullback of over 25% from that peak. - VALUATION DIVERGENCE — The average analyst price target of $524.51 implies a 41.4% upside, while the Python DCF estimate of $196.01 implies the stock is overvalued—this wide divergence creates valuation uncertainty. - TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed.
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