There has been very little movement in Broadcom Inc.'s share price. This situation is bound to change. An exit on the upside out of the current trading range should go with a comeback in volatility. Therefore, the timing for new long positions seems good.
Summary
● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.
● According to Refinitiv, the company's ESG score for its industry is good.
Strengths
● The company's EBITDA/Sales ratio is relatively high and results in high margins before depreciation, amortization and taxes.
● Margins returned by the company are among the highest on the stock exchange list. Its core activity clears big profits.
● Analysts have consistently raised their revenue expectations for the company, which provides good prospects for the current and next years in terms of revenue growth.
● For the last twelve months, analysts have been gradually revising upwards their EPS forecast for the upcoming fiscal year.
● Analysts covering this company mostly recommend stock overweighting or purchase.
● Over the past four months, analysts' average price target has been revised upwards significantly.
● There is high visibility into the group's activities for the coming years. Outlooks on future revenues from analysts covering the equity remain similar. Such hardly dispersed estimates support highly predictable sales for the current and upcoming fiscal years.
● The group usually releases upbeat results with huge surprise rates.
Weaknesses
● The company benefits from high valuations in earnings multiples.
● The company's "enterprise value to sales" ratio is among the highest in the world.
● The company appears highly valued given the size of its balance sheet.
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Broadcom Inc. specializes in designing, developing, and selling analog components and sub-systems, with mixed and optoelectronic signals. The group's products include power amplifiers, radio-frequency filters, encoders, optocouplers, fiber-optic transmitters and receivers, etc.
Net sales break down by market between semiconductors (78.7%) and infrastructures (21.3%).
Net sales are distributed geographically as follows: Americas (23.1%), Asia/Pacific (66.8%), and Europe/Middle East/Africa (10.1%).