AVGO Analysis — TradeApes

Broadcom Inc. (AVGO)

Technology Semiconductors

$385.73 close · Jun 06, 2026

Above 200 SMA

52W -19.9% from High

Methodology Breakdown

Methods agree on direction (under/over-valued) but the magnitudes diverge widely. The zone is defensible; the specific dollar isn't.

Method	Value	Role
DCF (Base Case)	$70.70	REFERENCE
DCF (TTM-anchored)	$73.42	REFERENCE
Peer Multiples	$163.88	REFERENCE
Earnings Power Value	$19.99	REFERENCE
Book Value Anchor	$108.11	REFERENCE
Earnings Anchor	$219.05	REFERENCE
Cash Floor	$2.03	REFERENCE
NAV Anchor	$108.11	REFERENCE

Verdict basis:


              direction_agreement

Health Score

Out of 100

Mixed

Pillar Scores

Financial Strength 70

Operating Trend 55

Valuation 30

Capital Allocation 40

Risk Management 70

Positives

↑ Strong interest coverage — EBIT covers interest 10×+ +2.5

↑ Free cash flow positive — business generates real spendable cash +2.5

↑ Decent ROIC — 10–20%, solid return on invested capital +1.3

Concerns

↓ Extreme P/E — above 45×, very high expectations embedded in price -5.0

↓ High stock comp burden — SBC 8–15% of revenue, material dilution cost -1.5

↓ Altman Z-Score in grey zone — uncertain financial stability -1.0

Signal contribution: +6.3 from strengths -7.5 from concerns

Health Score Trend 6 snapshots

Cross-Check: Greenblatt Magic Formula

⚠ Mild Divergence

Earnings Yield

1.7%

Rank 1067 / 1256

Return on Capital

182.8%

Rank 162 / 1256

Combined Rank

47th pctl

1256 companies ranked

Based on Joel Greenblatt's Magic Formula methodology. Not investment advice.

Financials

TTM Financials

Revenue ?Total sales generated from the company's primary business activities over the trailing twelve months.	68.28B
Gross Profit ?Revenue minus cost of goods sold. What remains before operating expenses — reflects pricing power and production efficiency.	46.31B
Operating Income ?Profit from core business operations after all operating expenses (EBIT). Excludes interest and taxes.	27.79B
Net Income ?Bottom-line profit after all expenses, interest, and taxes are deducted from revenue.	24.97B
Free Cash Flow ?Operating cash flow minus capital expenditures. The actual cash the business generates after maintaining its assets — the truest measure of profitability.	28.91B
EBITDA ?Earnings before interest, taxes, depreciation & amortization. A proxy for operating cash earnings that strips out accounting and financing differences.	28.37B
Total Debt ?Combined short-term and long-term interest-bearing debt obligations. Compare against cash and earnings to gauge leverage risk.	67.97B
Cash & Equivalents ?Highly liquid assets on hand — cash, money market funds, and short-term securities. The company's immediate financial cushion.	14.17B

Valuation

Market Cap	1885.45B
Enterprise Value	1940.57B
EV / Revenue	28.4x
EV / EBITDA	68.4x
P/E (TTM)	75.5x
Forward P/E (extrapolated)	47.3x
PEG	0.1x
P/FCF	65.2x
FCF Yield	1.5%

EV/EBITDA vs history — 41% percentile (mid-range)

CheapMidExpensive

EV/Sales vs history — 53% percentile (mid-range)

CheapMidExpensive

P/Book vs history — 82% percentile (historically expensive)

CheapMidExpensive

DCF Fair Value Range (base CAGR: 29.1%)

Bear

$253.93

Base

$574.97

Bull

$1,210.02

Bear $254 Current $385.73 (in range) Bull $1,210

Market is pricing in 21.8% FCF growth annually — base model assumes 29.1%

Key Metrics

Gross Margin ?Gross profit as a % of revenue. Measures how efficiently the company produces its goods or services — higher is better.	67.8%
EBITDA Margin ?EBITDA as a % of revenue. Shows core operating profitability before accounting adjustments — useful for comparing across industries.	41.5%
Net Margin ?Net income as a % of revenue. The ultimate measure of overall profitability after every expense, interest payment, and tax is accounted for.	36.6%
FCF Margin ?Free cash flow as a % of revenue. Shows how much of each dollar of revenue converts into real, spendable cash.	42.3%
Revenue Growth (YoY) ?Year-over-year change in total revenue. Measures business momentum — sustained growth above 15% is typically considered strong.	68.7%
Net Income Growth (YoY) ?Year-over-year change in net income. Shows whether profits are growing faster or slower than revenue — a key indicator of improving or deteriorating quality.	334.4%
Piotroski F-Score ?Score from 0–9 measuring financial strength across profitability, leverage, and efficiency signals. 8–9 = strong, 0–2 = distressed.	7 / 9
Altman Z-Score ?Bankruptcy risk model. Above 2.99 = safe zone, 1.81–2.99 = grey zone, below 1.81 = distress signal. Most useful for manufacturing companies.	2.24

Community Sentiment

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Quarterly Financials

Metric	Q1 '26	Q4 '25	Q3 '25	Q2 '25	Q1 '26	Q4 '24	Q3 '25	Q2 '25	Q1 '24	Q4 '24	Q3 '23	Q2 '23
Revenue ?Total quarterly sales from primary business operations.	19.31B	18.02B	15.95B	15.00B	14.92B	—	13.07B	12.49B	—	9.30B	8.88B	8.73B
Gross Profit ?Quarterly revenue minus cost of goods sold.	13.16B	12.25B	10.70B	10.20B	10.15B	—	8.36B	7.78B	—	6.41B	6.16B	6.12B
Operating Income ?Quarterly profit from core operations before interest and taxes (EBIT).	8.56B	7.51B	5.89B	5.83B	6.26B	—	3.79B	2.97B	—	4.24B	3.86B	4.01B
Net Income ?Quarterly bottom-line profit after all expenses and taxes.	7.35B	8.52B	4.14B	4.97B	5.50B	—	-1.88B	2.12B	—	3.52B	3.30B	3.48B
FCF ?Quarterly free cash flow: operating cash minus capital expenditures.	8.01B	7.47B	7.02B	6.41B	6.01B	—	4.79B	4.45B	4.69B	4.72B	4.60B	4.38B

Revenue & Free Cash Flow

Market Cap vs. DCF Fair Value Band

Shaded region = bear-to-bull DCF range. Line = actual market cap.

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Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Scores and valuations are derived from SEC filings and publicly available data. Always do your own research before making investment decisions.