Broadcom Stock Valuation

AVGO
 Stock
  

USD 484.80  4.94  1.03%   

What is the current enterprise value of Broadcom? Calculating the true value of any business is not as easy as it may seem. While the market cap of a public entity, such as Broadcom, is its stock price multiplied by the total number of shares outstanding, calculating Broadcom's enterprise value requires a different approach. It uses Broadcom's balance sheet items such as long-term debt, the book value of the preferred stock, minority interest, and other important financials.
Broadcom shows a prevailing Real Value of $515.29 per share. The current price of the firm is $484.8. At this time, the firm appears to be undervalued. Our model approximates the value of Broadcom from analyzing the firm fundamentals such as Current Valuation of 246.72 B, profit margin of 29.76 %, and Return On Equity of 39.71 % as well as examining its technical indicators and Probability Of Bankruptcy. In general, we favor picking up undervalued instruments and discarding overvalued instruments since, at some point, asset prices and their ongoing real values will blend.
  
Broadcom Valuation Module provides a unique way to ballpark how much the company is worth today. It is done using both, our quantitative analysis of the company fundamentals as well as its intrinsic market price estimation to project the real value. We also take into consideration other essential factors such as Broadcom's management style, its c-level domain expertise and tenure, its overall leadership history as well as current capital structure, and future earnings potential.
Undervalued
Today 484.80
Please note that Broadcom's price fluctuation is very steady at this time. Calculation of the real value of Broadcom is based on 3 months time horizon. Increasing Broadcom's time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Broadcom is useful when determining the fair value of the Broadcom stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Broadcom. Since Broadcom is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Broadcom Stock. However, Broadcom's intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value.
437.78
Downside
515.29
Real Value
517.36
Upside
Estimating the potential upside or downside of Broadcom helps investors to forecast how Broadcom stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Broadcom more accurately as focusing exclusively on Broadcom's fundamentals will not take into account other important factors:
Hype
Prediction
LowEstimated ValueHigh
484.63486.70488.77
Details
23 Analysts
Consensus
LowTarget PriceHigh
460.00680.35750.00
Details

Broadcom Valuation Ratios as Compared to Competition

Comparative valuation techniques use various fundamental indicators to help in determining Broadcom's current stock value. Our valuation model uses many indicators to compare Broadcom value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Broadcom competition to find correlations between indicators driving Broadcom's intrinsic value. More Info.
Broadcom is number one stock in last dividend paid category among related companies. It is number one stock in price to sales category among related companies fabricating about  0.37  of Price to Sales per Last Dividend Paid. The ratio of Last Dividend Paid to Price to Sales for Broadcom is roughly  2.68 . Comparative valuation analysis is a catch-all model that can be used if you cannot value Broadcom by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Broadcom's Stock . Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Broadcom's earnings, one of the primary drivers of an investment's value.
Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Broadcom's worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in Broadcom and how it compares across the competition.

About Broadcom Valuation

The stock valuation mechanism determines the current worth of Broadcom on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Broadcom. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Broadcom based exclusively on its fundamental and basic technical indicators. By analyzing Broadcom's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Broadcom's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Broadcom. We calculate exposure to Broadcom's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Broadcom's related companies.
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. Broadcom Inc. was incorporated in 2018 and is headquartered in San Jose, California. Broadcom operates under Semiconductors classification in the United States and is traded on NASDAQ Exchange. It employs 20000 people.
Broadcom's stock price is the clearest measure of market expectations about its performance. Without stock valuation, investors cannot independently discern whether Broadcom's value is low or high relative to the company's performance and growth projections. Determining the market value of Broadcom can be done in different ways, such as multiplying its stock price by its outstanding shares.
A single share of Broadcom represents a small ownership stake in the entity. As a stockholder of Broadcom, your percentage of company ownership is determined by dividing the number of shares you own by the total number of shares outstanding and then multiplying that amount by 100. Owning stock in a company generally confers both corporate voting rights and income from any dividends paid to the stock owner.

Broadcom Dividends Analysis For Valuation

There are various types of dividends Broadcom can pay to its shareholders, and the actual value of the dividend is determined on a per-share basis. It is to be paid equally to all of Broadcom shareholders on a specific date, known as the payable date. The cash dividend is the most common type of dividend payment - it is the payment of actual cash from Broadcom directly to its shareholders. There are other types of dividends that companies can issue, such as stock dividends or asset dividends. When Broadcom pays a dividend, it has no impact on its enterprise value. It does, however, lowers the Equity Value of Broadcom by the value of the dividends paid out.

Broadcom Valuation Growth Rates

Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as Broadcom does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
Quick Ratio1.75
Earnings Quarterly Growth73.50%
Revenue Growth22.60%
Payout Ratio76.28%
Enterprise Value To Ebitda14.64
Earnings Growth79.70%
Enterprise Value To Revenue8.23
Please continue to Trending Equities. Note that the Broadcom information on this page should be used as a complementary analysis to other Broadcom's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

Complementary Tools for Broadcom Stock analysis

When running Broadcom price analysis, check to measure Broadcom's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Broadcom is operating at the current time. Most of Broadcom's value examination focuses on studying past and present price action to predict the probability of Broadcom's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Broadcom's price. Additionally, you may evaluate how the addition of Broadcom to your portfolios can decrease your overall portfolio volatility.
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Is Broadcom's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Broadcom. If investors know Broadcom will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Broadcom listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Broadcom is measured differently than its book value, which is the value of Broadcom that is recorded on the company's balance sheet. Investors also form their own opinion of Broadcom's value that differs from its market value or its book value, called intrinsic value, which is Broadcom's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Broadcom's market value can be influenced by many factors that don't directly affect Broadcom's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Broadcom's value and its price as these two are different measures arrived at by different means. Investors typically determine Broadcom value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Broadcom's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.