US Equities Analysis

AVGO — Broadcom

Research evidence pack

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 48.99%
Profit Margins 38.85%
Return on Equity 37.28%
Return on Assets 12.12%
Free Float 4.7B
Dividend Yield 0.71%
Short Int % Utilisation 1.25%

2.2 Growth

Metric Value
Revenue Growth 47.9%
Free Cash Flow 27.21B
EBITDA 43.14 (Ratio)
Enterprise Value 1815.57B
EV/Revenue 24.06
EV/EBITDA 43.14

Revenue growth of 47.9% places the company in a high-growth category.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 45.29%
Risk / Std Dev (Ann.)* 48.09%
1-Year Price Return* 29.23%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $392.99
52-Week Range $281.87 – $495.00
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $63.89B
Prior annual revenue $51.57B
EBIT $25.94B
Tax rate 21.00%
NOPAT = EBIT × (1 − tax rate) $20.49B
Forecast start-growth basis 15.00%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $20.49B
Add: depreciation & amortisation $8.78B
Less: capital expenditure -$623.00M
Less/(add): working-capital cash-flow movement -$8.50B
Current unlevered FCFF $20.14B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 15.00% $23.57B $10.09B -$716.45M -$9.78B $23.17B $21.84B
2 11.88% $26.36B $11.29B -$3.42B -$10.94B $23.29B $19.52B
3 8.75% $28.67B $12.28B -$6.57B -$11.89B $22.48B $16.75B
4 5.62% $30.28B $12.97B -$9.96B -$12.56B $20.73B $13.73B
5 2.50% $31.04B $13.29B -$13.29B -$12.88B $18.17B $10.69B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 1.47
Cost of equity 12.81%
Pre-tax cost of debt 4.84%
WACC 12.50%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $186.16B
Implied terminal EV / EBITDA 3.54x
Terminal value as % of enterprise value 55.59%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $82.53B
Present value of terminal value $103.30B
Indicated enterprise value $185.82B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $185.82B
Less: gross interest-bearing debt $65.14B
Add: cash and equivalents $16.18B
Add: affiliate investments $0.00
Less: minority interests $0.00
Indicated common equity value $136.87B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 4,853,000,000.00
Share-count basis reported diluted weighted-average shares
Current market price $381.14
DCF indicative value per share $28.20
Indicative value vs. market price -92.60%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 3/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:23:27.096959 UTC; latest reported fiscal period: 2025-10-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

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