Benzinga - by Benzinga Insights, Benzinga Staff Writer.
In the fast-paced and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Broadcom (NASDAQ:AVGO) in comparison to its major competitors within the Semiconductors & Semiconductor Equipment industry. By analyzing crucial financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in the industry.
Broadcom Background Broadcom is the sixth-largest semiconductor company globally and has expanded into various software businesses, with over $30 billion in annual revenue. It sells 17 core semiconductor product lines across wireless, networking, broadband, storage, and industrial markets. It is primarily a fabless designer but holds some manufacturing in-house, like for its best-of-breed FBAR filters that sell into the Apple iPhone. In software, it sells virtualization, infrastructure, and security software to large enterprises, financial institutions, and governments.Broadcom is the product of consolidation. Its businesses are an amalgamation of former companies like legacy Broadcom and Avago Technologies in chips, as well as Brocade, CA Technologies, and Symantec in software.
| Broadcom Inc | 54.29 | 9.63 | 16.41 | 2.81% | $4.61 | $7.38 | 34.17% |
| NVIDIA Corp | 70.75 | 60.52 | 37.80 | 32.31% | $17.75 | $20.41 | 262.12% |
| Taiwan Semiconductor Manufacturing Co Ltd | 32.02 | 7.67 | 12.41 | 6.38% | $428.26 | $314.51 | 16.52% |
| Advanced Micro Devices Inc | 230.38 | 4.57 | 11.38 | 0.22% | $0.9 | $2.56 | 2.24% |
| Qualcomm Inc | 27.80 | 9.51 | 6.45 | 9.79% | $3.08 | $5.28 | 1.23% |
| Texas Instruments Inc | 30.75 | 10.59 | 10.77 | 6.52% | $1.77 | $2.1 | -16.4% |
| ARM Holdings PLC | 496.28 | 28.48 | 46.50 | 4.35% | $0.06 | $0.89 | 46.6% |
| Intel Corp | 31.88 | 1.24 | 2.37 | -0.36% | $2.09 | $5.22 | 8.61% |
| Analog Devices Inc | 55.21 | 3.33 | 11.30 | 0.85% | $0.93 | $1.18 | -33.83% |
| Microchip Technology Inc | 26.88 | 7.54 | 6.71 | 2.25% | $0.47 | $0.79 | -40.62% |
| STMicroelectronics NV | 11.24 | 2.32 | 2.50 | 3.04% | $1.06 | $1.44 | -18.41% |
| Monolithic Power Systems Inc | 93.44 | 18.05 | 20.95 | 4.45% | $0.1 | $0.25 | 1.51% |
| ON Semiconductor Corp | 15.10 | 3.92 | 4.03 | 5.7% | $0.71 | $0.85 | -4.95% |
| First Solar Inc | 30.87 | 4.57 | 8.88 | 3.48% | $0.36 | $0.35 | 44.83% |
| GLOBALFOUNDRIES Inc | 30.07 | 2.37 | 3.80 | 1.19% | $0.54 | $0.39 | -15.86% |
| ASE Technology Holding Co Ltd | 22.47 | 2.67 | 1.34 | 1.94% | $23.55 | $20.87 | 1.46% |
| United Microelectronics Corp | 12.77 | 1.85 | 3.10 | 2.9% | $24.0 | $16.9 | 0.78% |
| Skyworks Solutions Inc | 18.12 | 2.43 | 3.41 | 2.91% | $0.31 | $0.42 | -9.29% |
| Universal Display Corp | 42.21 | 6.20 | 15.13 | 3.86% | $0.07 | $0.13 | 26.67% |
| Lattice Semiconductor Corp | 39.06 | 12.28 | 12.25 | 2.15% | $0.03 | $0.1 | -23.6% |
| MACOM Technology Solutions Holdings Inc | 115.31 | 7.08 | 11.63 | 1.45% | $0.04 | $0.1 | 6.98% |
| Cirrus Logic Inc | 24.43 | 3.52 | 3.75 | 2.48% | $0.05 | $0.19 | -39.93% |
| Average | 69.38 | 9.56 | 11.26 | 4.66% | $24.1 | $18.81 | 10.32% |
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.dividend-frequency { font-size: 12px; color: #6c757d; } By carefully studying Broadcom, we can deduce the following trends:
- With a Price to Earnings ratio of 54.29, which is 0.78x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
- With a Price to Book ratio of 9.63, which is 1.01x the industry average, Broadcom might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
- The stock's relatively high Price to Sales ratio of 16.41, surpassing the industry average by 1.46x, may indicate an aspect of overvaluation in terms of sales performance.
- The Return on Equity (ROE) of 2.81% is 1.85% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
- With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $4.61 Billion, which is 0.19x below the industry average, the company may face lower profitability or financial challenges.
- With lower gross profit of $7.38 Billion, which indicates 0.39x below the industry average, the company may experience lower revenue after accounting for production costs.
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With a revenue growth of 34.17%, which surpasses the industry average of 10.32%, the company is demonstrating robust sales expansion and gaining market share.
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When comparing Broadcom with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
- Compared to its top 4 peers, Broadcom has a higher debt-to-equity ratio of 1.08, indicating a higher level of debt financing.
- This higher debt proportion can expose the company to increased financial risk and potential challenges.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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