Semiconductors · NASDAQ
Current Price
$405.45
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Broadcom Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Broadcom, Inc. is a global technology company, which designs, develops and supplies semiconductor and infrastructure software solutions. The company is headquartered in San Jose, California and currently employs 19,000 full-time employees. The firm operates through four segments: Wired Infrastructure, Wireless Communications, Enterprise Storage, and Industrial & Other. The company offers a range of products that are used in end-products, such as enterprise and data center networking, home connectivity, set-top boxes, telecommunication equipment, smartphones, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Its product portfolio ranges from discrete devices to complex sub-systems that include multiple device types, and also includes firmware for interfacing between analog and digital systems. Its products include mechanical hardware that interfaces with optoelectronic or capacitive sensors.
ROIC (TTM)
17.6%
ROE (TTM)
32.9%
FCF Yield
1.51%
The intrinsic value of AVGO depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether AVGO is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $405.45. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Broadcom Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Semiconductors industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting AVGO's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Broadcom Inc., this means projecting how much free cash flow the Semiconductors will produce over the next 5-10 years, then discounting those amounts to today's dollars. AVGO's ROIC of 17.6% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For AVGO, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
