Fundamental analysis: Broadcom Inc. (AVGO)

Awarener score: 6.8

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Excellent) and growth (Average), and the company's inclination to return cash to the stockholders (Good).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 7.5

Business has been growing at a low pace. It's been similar to peer companies.
Broadcom Inc. business trend stability is excellent. The higher the stability, the lower the risk. It looks top-notch against rivals.

Margins score: 9.0

AVGO profit margins -on goods and services sold- are usually very good. They stand better than most rival companies.
Business profit on sales tends to be huge. It's top tier when measured against competitors.
Profits on sales made -available to repay debt and purchase properties- are usually excellent. They remain impressive in relation to peers.
Earnings -before income taxes and interests on loans taken- tend to be excellent in relation to total revenues. They're still top-notch against similar companies.
Profits -before income taxes- are usually excellent considering total sales, and remain great when measured against rivals.
Total net profit tends to be excellent when confronted to sales. Company stands great when measured against comparable firms.

Growth score: 8.0

Broadcom Inc. profit -on goods and services sold- has been growing at a normal pace. It's been a slight improvement compared to competitors.
In recent years, earnings -on operations- have been growing at a good step, which has been slightly better than comparable firms.
Profits -available to repay debt and purchase properties- have been growing at a good pace, which compares similar to peer enterprises.
Earnings -before income taxes and interests on loans taken- have been growing at an excellent tempo. It turns to be a slight improvement compared to similar stocks.
In past years, profits -before income taxes- grew at an excellent speed. It was well ranked against rivals.
In the previous years, growth trend on total net profit has been excellent, and more than average in relation to peer companies.
Earnings per share have grown at an excellent rhythm in past years. It's been a slight improvement compared to industry peers.

Miscellaneous score: 6.7

AVGO managed to pay no income taxes on profits made in the past years, sometimes even got a credit. It's been better than most peers.
Research and development expenses consume a moderate portion of revenues. It's similar to competitors.
The company grows sparsely in relation to research and development efforts. It stands rather normal in relation to rival companies.

Profitability score: 9.5

Broadcom Inc. usually gets excellent returns on the resources it controls. It proves more than average in relation to peer firms.
The company normally gets excellent proceeds -on the resources directly invested in the business-. They remain a slight improvement compared to similar companies.
Profitability -in relation to owned resources- is usually paramount. It ranks top tier when measured against competitors.
In the past, got huge returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's top tier when measured against comparable enterprises.

Usage of Funds score: 5.5

AVGO usually uses a slight portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is light. It stands top tier when measured against rival firms.
The company is usually sparsely replacing property, plant, and equipment that gets old, instead using funds in something else. It can't keep forever, which is last-in-rank when measured against industry peers.
In the past twelve months it paid run-of-the-mill dividends, considering the current stock price. It came somewhat better than competitors.
Has increased dividend payments in the past years. Business prospects may have improved. The company has behaved close to average when compared to similar firms.
The company usually uses some portion of genuine funds generated to pay dividends. Dividend payments should be safe, unless business prospects take a nosedive. Sustainability looks mediocre against comparable companies.
The company barely enlarges the pool of investors, resulting in slightly more mouths feeding on the pie of profits. It remains a slight improvement compared to peer enterprises.
Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands close to average when compared to rivals.
The company uses a large portion of genuine fund generation to reward investors, which can probably be sustained for as long as business doesn't turn sour. It still looks almost average when measured against competitors.

Balance Sheet score: 5.5

Broadcom Inc. intangible assets (like brands and goodwill) represent a huge portion of resources controlled, according to accounting books. There could be major difficulties in liquidating them if the company ever gets in financial distress. It happens to be last-in-rank when measured against peer companies.
The company has roughly triple short-term resources than short-term obligations. Liquidity concerns are most likely unimportant. It turns to be lacking compared to similar firms.
A substantial part of resources controlled were provided for with financial debt. Creditors have as many claims on the company as shareholders. The situation is somewhat risky. It remains bottom tier against rival firms.
Most controlled resources might be only slowly turned into cash and equivalents, which is risky. It looks last-in-rank when measured against rivals.
For every dollar of short-term obligations, the company has more than enough dollars in cash and short-term receivables. It's rather normal in relation to peer firms.
For every dollar of short-term obligations, the company has enough dollars in cash and equivalents, which is slightly better than similar enterprises.
Usually, sales are on a month credit. It still ranks more than average in relation to peers.
Normally has approximately somewhat more than two months of sales worth in inventory. It comes up as excellent in relation to competitors.
On average, it takes higher than three months from the purchase to charging customers. It happens to be top-notch against peers.
On average pays suppliers before a month since the purchase. It ranks substantially worse when measured against industry peers.
The company pays its suppliers roughly two months before charging its customers, so there's some money invested in working capital. It's excellent in relation to similar companies.
Net interest expenses consume a minor portion of usual business earnings, and are largely bearable. It stands somewhat worse than rival firms.
Business earnings have usually been good when measured against loans taken. Cutting back reinvesting in the business, it could take less than three years to repay the obligations with current profitability. It ranks below average when measured against comparable enterprises.
Revenues are excellent in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. Low property, plant, and equipment requirements, allows the company to keep more money to reward stockholders in the long run. It looks impressive in relation to similar firms.
Resource exploitation is reasonable when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still somewhat worse than peer companies.

Valuation score: 4.9

Broadcom Inc. looks expensive in relation to profits and financial position. It happens to be similar to competitors.
Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains a disappointment compared to peers.
In the past twelve months, the company generated some slightly better free funds in relation to the stock price, which stands somewhat better than similar companies.
The company usually generates reasonably more than enough genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, the current valuation might be fair. It's still encouraging in relation to industry firms.
In the past twelve months, the company has barely rewarded investors, considering both dividends and share on the pie of earnings. It came up a slight improvement compared to peer ventures.
The company has neither net debt nor net cash. It may borrow extra money if it wishes so, or start cumulating cash for future uses. It looks mediocre against similar enterprises.
Considering the past twelve months, traditional Price-to-Earnings relation is high. Substantial improvement expectations are already in the stock price, which is somewhat risky. It ranks similar to peer companies.
Comparing the current stock price with the past twelve-months revenues gives a very large relationship. The stock price might rely more on expectations and resources controlled than on anything else. It looks in a very weak position compared to rival firms.
The relation between the stock price and accounting book value is extremely high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains worse than most peer firms.
In the past twelve months, the operating business earned some money when compared to the current stock price and financial position. It happens to be encouraging in relation to industry peers.
In an alternate metric of bang for the buck, the company has usually shown a modest earnings power ability when measured against the current stock price and financial position. It's still rather normal in relation to peer companies.

Total score: 7.1

Company at a glance: Broadcom Inc. (AVGO)

Sector, industry: Technology, Semiconductors

Market Cap: 338.54 billions

Revenues TTM: 35.67 billions

Broadcom Inc. designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates in two segments, Semiconductor Solutions and Infrastructure Software. It provides set-top box system-on-chips (SoCs); cable, digital subscriber line, and passive optical networking central office/consumer premise equipment SoCs; wireless local area network access point SoCs; Ethernet switching and routing merchant silicon products; embedded processors and controllers; serializer/deserializer application specific integrated circuits; optical and copper, and physical layers; and fiber optic transmitter and receiver components. The company also offers RF front end modules, filters, and power amplifiers; Wi-Fi, Bluetooth, and global positioning system/global navigation satellite system SoCs; custom touch controllers; serial attached small computer system interface, and redundant array of independent disks controllers and adapters; peripheral component interconnect express switches; fiber channel host bus adapters; read channel based SoCs; custom flash controllers; preamplifiers; and optocouplers, industrial fiber optics, and motion control encoders and subsystems. Its products are used in various applications, including enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Broadcom Inc. was incorporated in 2018 and is headquartered in San Jose, California.