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Broadcom Ltd
AVGO : NASDAQ : Technology
$119.20 -0.51 | -0.43%
Today's Range: 118.65 - 123.67
Avg. Daily Volume: 4,764,800
02/10/16 - 3:59 PM ET

Financial Analysis


BROADCOM LTD's gross profit margin for the fourth quarter of its fiscal year 2015 has increased when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. BROADCOM LTD is extremely liquid. Currently, the Quick Ratio is 2.56 which clearly shows the ability to cover any short-term cash needs. AVGO managed to increase the liquidity from the same period a year ago, despite already having very strong liquidity to begin with. This would indicate improved cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 45.35% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q4 FY15 Q4 FY14
Net Sales ($mil)1840.01590.0
EBITDA ($mil)793.0618.0
EBIT ($mil)543.0368.0
Net Income ($mil)429.0135.0


Balance Sheet Q4 FY15 Q4 FY14
Cash & Equiv. ($mil)1843.01628.0
Total Assets ($mil)10592.010491.0
Total Debt ($mil)3949.05509.0
Equity ($mil)4714.03243.0


Profitability Q4 FY15 Q4 FY14
Gross Profit Margin64.5160.63
EBITDA Margin43.0938.86
Operating Margin29.5123.14
Sales Turnover0.640.41
Return on Assets12.872.5
Return on Equity29.59.52
Debt Q4 FY15 Q4 FY14
Current Ratio3.373.77
Debt/Capital0.460.63
Interest Expense41.054.0
Interest Coverage13.246.81


Share Data Q4 FY15 Q4 FY14
Shares outstanding (mil)276.26254.33
Div / share0.420.32
EPS1.640.5
Book value / share17.0612.75
Institutional Own % n/a n/a
Avg Daily Volume4537075.03688307.0

Valuation


BUY. BROADCOM LTD's P/E ratio indicates a premium compared to an average of 21.28 for the Semiconductors & Semiconductor Equipment industry and a premium compared to the S&P 500 average of 21.13. For additional comparison, its price-to-book ratio of 7.98 indicates a significant premium versus the S&P 500 average of 2.51 and a significant premium versus the industry average of 4.14. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, BROADCOM LTD proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
AVGO 27.78 Peers 21.28   AVGO 16.22 Peers 16.77

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

AVGO is trading at a significant premium to its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

AVGO is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
AVGO NA Peers 17.07   AVGO NA Peers 3.11

Neutral. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth potential.

Ratio not available.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
AVGO 7.98 Peers 4.14   AVGO 322.41 Peers 35.28

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

AVGO is trading at a significant premium to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

AVGO is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AVGO 5.51 Peers 3.95   AVGO 59.85 Peers 9.49

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

AVGO is trading at a significant premium to its industry.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

AVGO has a sales growth rate that significantly exceeds its peers.

 

 

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