Broadcom Inc. ($AVGO) Earnings (Q3 FY22)

 Broadcom Inc. ($AVGO) Earnings and Opinion:


Broadcom is a company in the Technology sector and operates in the Semiconductors industry. The company designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complimentary metal oxide semiconductor based devices and analog III-V based products worldwide. Broadcom was incorporated in 2018 and is currently headquartered in San Jose, California. The company made its debut on the stock market in 2009.

Broadcom Earnings Results:

  • Revenues of $8.46B beating expectations of $8.41B
  • Gross Profit of $6.43B beating expectations of $6.41B
  • Operating Profit of $5.2B beating expectations of $5.17B
  • EPS of $9.73 beating expectations of $9.56
  • Guidance shows revenues higher than estimated but EBITDA lower than estimated
Opinion:

 Broadcom is up a little bit under 5%, after reporting earnings after the market closed yesterday. The company beat expectations on all the topline metrics. They had some margins that were slim misses though. I think a lot of investors are impressed with how this company has performed, despite all of the headwinds and problems with the semiconductor industry. The guidance was also strong for sales as well, as profitability may dip a little bit, but that may be due to the fact of the expenses rising. As far as valuation goes, the P/E ratio and P/S ratio both linger right around industry averages. ROE and ROA both look solid and the margins are nice. Growth seems to increase next year as semiconductors are finally getting the funding they need. Plus with in house production the main goal for the US, Broadcom will benefit from that. The current ratio is at 2.14 and cash is outweighed by debt. In my opinion, this may be one of the best semiconductor stocks. It had a solid business model and it could be a good foundational stock in a portfolio. I think there is plenty of upside with this one, especially because it is at near fair value right now. I am long Broadcom.

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