10Y annualized return is
excellent
at 32.3% per year
AVGO has met or exceeded earnings expectations in
most
recent quarters (9/10)
Strong Market Position
Solid Profit Margins
Good Return on Equity
Decent Liquidity Ratios
Manageable Debt Levels
Strong Revenue Growth
Successful VMware Integration
High Cash Return to Shareholders
Massive AI Market Opportunity
Continued Innovation in AI Technology
High Valuation Ratios
Moderate Net Profit Margin
High Debt Load
Non-AI Semiconductor Revenue Decline
Broadcom's strong financial performance and successful integration of VMware reflect a solid business model with competitive advantages. The company is well-positioned for future growth, particularly in the AI market, although it faces challenges in its non-AI segments. Overall, the future prospects appear promising with substantial revenue opportunities in AI.
Analysis Date: December 12, 2024
Last Updated: March 11, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Broadcom Inc. is a company that makes tiny electronic parts called semiconductors, which help power many devices we use every day. They create chips that are found in things like smartphones, Wi-Fi routers, and cable boxes, allowing these devices to connect and communicate. Broadcom also provides software that helps manage data and networks, making it easier for businesses to operate their technology smoothly. Simply put, they create important components that support various technology products and services around the world.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Latest News
Broadcom Inc. (AVGO) has been upgraded to a Zacks Rank #1 (Strong Buy), reflecting growing optimism about the company's earnings prospects. This might...
AES, DPMLF and AVGO made it to the Zacks Rank #1 (Strong Buy) income stocks list on April 22, 2025.
When it comes to designing semiconductor chips used to power artificial intelligence (AI) workloads, two companies stand head and shoulders above the ...
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$82.60
Current Market Price: $146.51
IV/P Ratio: 0.56x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-77.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for AVGO
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (68.19)
P/B ratio ≤ 1.5 (9.84)
Current ratio ≥ 2.0 (1.00x)
Long-term debt < Net current assets (761.58x)
Margin of safety (-77.0%)
AVGO does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
14.75%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
63.28%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
18.47%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
AVGO has a gross profit margin of approximately 60.18%, showcasing effective cost management and strong pricing power.
With a return on equity of 8.62%, AVGO demonstrates effective use of shareholders' equity to generate profits.
The net profit margin of 11.43% suggests that while AVGO is profitable, there may be room for improvement in converting revenue into actual profit.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.95x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q1 2025
Current Ratio
Current assets divided by current liabilities
1.00x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q1 2025
AVGO's current ratio of 1.17 indicates it has enough short-term assets to cover its short-term liabilities, reflecting good liquidity.
With a debt-to-equity ratio of 0.998, AVGO maintains a balanced approach to leveraging, indicating moderate financial risk.
The debt-to-assets ratio of approximately 40.79% suggests that a significant portion of AVGO's assets are financed by debt, which could pose risks in adverse conditions.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Broadcom achieved a record consolidated revenue growth of 44% year-over-year, reaching $51.6 billion for fiscal year 2024. The semiconductor revenue also saw significant growth, indicating a robust demand for its products.
The acquisition of VMware has been transformative, with the integration largely complete and VMware's revenue trajectory on a growth path. Operating margins for VMware reached 70%, showcasing effective management post-acquisition.
Broadcom returned a record $22 billion in cash to shareholders through dividends and buybacks, highlighting a strong commitment to shareholder value.
Broadcom projects a Serviceable Addressable Market (SAM) of $60 billion to $90 billion in AI revenue by fiscal 2027, driven by strong demand from hyperscalers for custom AI accelerators and networking solutions.
Broadcom is positioned to lead in AI semiconductor solutions, with a significant growth in AI revenue (220% year-over-year) and plans for next-generation 3-nanometer XPUs, which will enhance performance and capabilities.
There was a notable decline in non-AI semiconductor revenue by 23% year-over-year, indicating potential challenges in that segment amid the AI-focused growth strategy.