Broadcom Inc. (NASDAQ: AVGO)

Sector: Technology Industry: Semiconductors CIK: 0001730168
Market Cap 1,624.80 Bn
P/B 19.99
P/E 70.26
P/S 25.43
ROIC (Qtr) 22.26
Div Yield % 0.87
Rev 1y % (Qtr) 28.18
Total Debt (Qtr) 65.14 Bn
Debt/Equity (Qtr) 0.80

About

Broadcom Inc., with its ticker symbol AVGO, is a global technology leader that operates in the semiconductor and infrastructure software solutions industry. The company's main business activities involve providing semiconductor solutions for managing the movement of data in data center, service provider, and enterprise networking applications. Broadcom's product portfolio ranges from discrete devices to complex sub-systems that include multiple device types and may also incorporate firmware for interfacing between analog and digital systems. Broadcom's...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 27.54B provides robust 0.42x coverage of total debt 65.14B, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 16.18B provide 5.13x coverage of short-term debt 3.15B, demonstrating strong liquidity position and minimal refinancing risk.
  • Robust free cash flow of 26.91B exceeds capital expenditure of 623M by 43.20x, indicating strong organic growth funding capability.
  • Strong operating cash flow of 27.54B provides 6.54x coverage of SG&A expenses 4.21B, showing efficient operational cost management.
  • Robust tangible asset base of 41.02B provides 3.14x coverage of working capital 13.06B, indicating strong operational backing.

Bear case

  • Operating cash flow of 27.54B barely covers its investment activities of (580M), with a coverage ratio of -47.48, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 27.54B provides thin coverage of dividend payments of (11.14B) with a -2.47 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (580M) provide weak support for R&D spending of 10.98B, which is -0.05x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • High receivables of 7.14B relative to inventory of 2.27B (3.15 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • The company's operating cash flow of 27.54B shows concerning coverage of stock compensation expenses of 7.57B, with a 3.64 ratio indicating potential earnings quality issues.

Product and Service Breakdown of Revenue (2025)

Product and Service Breakdown of Revenue (2025)

Peer comparison

Companies in the Semiconductors
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NVDA Nvidia Corp 4,516.69 Bn 45.53 24.14 10.48 Bn
2 TSM Taiwan Semiconductor Manufacturing Co Ltd 1,678.13 Bn 32.54 14.09 31.18 Bn
3 AVGO Broadcom Inc. 1,624.80 Bn 70.26 25.43 65.14 Bn
4 MU Micron Technology Inc 386.61 Bn 32.46 9.14 12.43 Bn
5 AMD Advanced Micro Devices Inc 330.88 Bn 100.08 10.33 3.87 Bn
6 INTC Intel Corp 300.63 Bn 1,518.33 5.63 46.55 Bn
7 QCOM Qualcomm Inc/De 195.07 Bn 35.20 4.40 14.81 Bn
8 TXN Texas Instruments Inc 173.86 Bn 34.48 10.07 14.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 9.81 4.22
EV to Cash from Ops. EV/CFO 60.95 -369.72
EV to Debt EV to Debt 25.77 90.98
EV to EBIT EV/EBIT 64.70 -66.75
EV to EBITDA EV/EBITDA 48.99 23.41
EV to Free Cash Flow [EV/FCF] EV/FCF 62.36 -8.88
EV to Market Cap EV to Market Cap 1.03 0.80
EV to Revenue EV/Rev 26.27 20.68
Price to Book Value [P/B] P/B 19.99 5.21
Price to Earnings [P/E] P/E 70.26 11.55
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.08 2.39
Dividend Payout Ratio % Div Payout % (Qtr) 48.10 8.25
Dividend per Basic Share Div per Share (Qtr) 2.36 0.63
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 41.32 9.91
Interest Coverage Int. cover (Qtr) 8.08 8.38
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -13.69 -155.98
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 73.06 45.60
Dividend Growth (1y) % Div 1y % (Qtr) 49.37 5.64
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 217.53 26.23
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 45.95 47.12
EBIT Growth (1y) % EBIT 1y % (Qtr) 90.78 25.83
EBT Growth (1y) % EBT 1y % (Qtr) 135.70 39.93
EPS Growth (1y) % EPS 1y % (Qtr) 286.61 24.64
FCF Growth (1y) % FCF 1y % (Qtr) 38.63 244.42
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 33.18 43.10
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.37 0.49
Cash Payout Ratio Cash Payout (Qtr) 0.40 0.09
Cash Ratio Cash Ratio (Qtr) 0.87 2.23
Current Ratio Curr Ratio (Qtr) 1.71 5.43
Debt to Equity Ratio Debt/Equity (Qtr) 0.80 0.34
Interest Cover Ratio Int Coverage (Qtr) 8.08 8.38
Times Interest Earned Times Interest Earned (Qtr) 8.08 8.38
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 54.30 -112.38
EBIT Margin % EBIT Margin % (Qtr) 40.60 -91.98
EBT Margin % EBT Margin % (Qtr) 35.58 -132.25
Gross Margin % Gross Margin % (Qtr) 67.80 47.73
Net Profit Margin % Net Margin % (Qtr) 36.20 -133.26