Broadcom Inc. (AVGO) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Broadcom Inc.

Updated on October 20, 2026 · accounts published on September 2, 2026

A highly profitable chipmaker with expanding margins and a solid balance sheet

Broadcom trades at a P/E of 41.6 over the last 12 months, 30 % above its sector median, while its operating margin reached 48 %.

• Is Broadcom expensive or cheap? Broadcom trades at a P/E of 41.6, a 30 % premium to the 32.0 median of its sector over the last 12 months.
• How is the business doing? Operating margin reached 48 % over the last 12 months, double its 2014-2025 average of 24 %.
• How strong is the balance sheet? Net debt was $11.07 per share in fiscal 2025, only 3.4 % of the share price and 1.4× EBITDA.
• What to expect from the next earnings? Analysts expect EPS of $3.82 on December 9, 2026, after Broadcom beat estimates in each of the last 8 quarters.
• Does it grow with real cash or by diluting shareholders? Free cash flow was 42 % of revenue in fiscal 2025, but stock-based pay took 11.8 %, above the 10 % healthy line.

Is Broadcom expensive or cheap?

Over the last 12 months Broadcom trades at a P/E of 41.6. The median for 359 technology companies is 32.0, so Broadcom carries a 30 % premium. Its EV/EBITDA of 30.4× is also above its five-year average of 26.4×, past the 110 % line where the sector counts it as expensive. A free cash flow yield of 2.1 % and an earnings yield of 1.8 % mean buyers are paying today for growth that has not arrived yet. The shares are down 13 % over 12 months and sit 32 % below the 52-week high of $481.57. The pullback has narrowed the premium but has not closed it.

How is the business doing?

Over the last 12 months revenue grew 24 % and EPS rose 288 %. Operating margin reached 48 %, up from 40 % in fiscal 2025 and double the 24 % average of fiscal 2014-2025. ROIC of 24.0 % is 15.9 points above the 8.1 % median of 464 sector peers, so the business earns far more on its capital than the typical peer. The record is less consistent than today's numbers suggest. ROIC topped 10 % in only 5 of the last 10 fiscal years and fell to −0.9 % in 2016, which makes this level of profitability fairly recent.

How strong is the balance sheet?

Debt poses no strain. Net debt of $11.07 per share in fiscal 2025 equals 3.4 % of the current price and 1.4× EBITDA, inside the 2.0× that semiconductor companies can tolerate. Over the last 12 months debt to equity is 0.60 and the current ratio is 2.50. An Altman Z of 12.5 puts Broadcom deep in the safe zone, and its Piotroski score is 8 of 9. The dividend has risen for 11 consecutive fiscal years through 2025 on a payout of 48 % of earnings. At this price, though, the 0.8 % yield is a small part of the return.

What to expect from the next earnings?

On September 2, 2026 Broadcom reported EPS of $3.32 against $3.22 expected, a 3.1 % beat and its eighth in eight quarters. For the results due December 9, 2026, analysts expect $3.82, well above the quarter just reported. Over the past 30 days the 2026 EPS consensus has barely moved, from $11.67 to $11.68 across 27 analysts. Sentiment is close to unanimous: 54 of 60 analysts rate the stock a buy, 6 a hold and none a sell. At a P/E of 41.6 most of that optimism is already in the price, so another routine beat may do less for the shares than a miss would do against them.

Does it grow with real cash or by diluting shareholders?

In technology, generic ratios can flatter a company that pays its staff in shares, so growth, pricing power and dilution tell you more. Broadcom passes most of these tests. Revenue per share grew 18.6 % a year over fiscal 2022-2025, above the 15 % healthy bar. Gross margin was 68 % in fiscal 2025, well clear of the 45 % mark for semiconductors, and free cash flow reached 42 % of revenue against a 20 % threshold. The weak spot is stock-based compensation, at 11.8 % of revenue in fiscal 2025. That is above the 10 % healthy level, though still short of the 20 % the sector treats as toxic. The cash is real, but new shares pay for part of it.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.