Value
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.9 |
| P/S | 0.0 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 7.5 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 16.6x
- ▸PEG: 0.32
AVGO · Why this verdict
Why Broadcom (AVGO) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictBUY WAIT
Overall score6.8/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Broadcom pairs elite quality (ROE 44%, margins 43%, Piotroski 9/9) with 86% YoY growth at a forward P/E of 16.8x, and analysts see 49.6% upside. The chart is still below its 200-day average, so timing, not business strength, is the open question.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue and earnings growth of 86% YoY is paired with a forward P/E of 16.8x and a PEG of 0.32, making growth cheap relative to earnings. Valuation breakdown | Growth should stay high enough to keep the PEG below 1.0 as earnings compound. | →Stable |
| CounterGrowth of 86% is unlikely to persist, and a PEG built on peak growth rates flatters valuation if growth normalizes. | ||
Broadcom is a high-quality compounder with excellent ROE of 44%, strong margins of 43%, a wide economic moat and a Rule of 40 score of 120. Quality breakdown | Returns and margins should hold near current levels over 12 months, sustaining the quality score near 9.2. | →Stable |
| CounterFree cash flow converts only 80% of net income, an earnings-quality warning, and peak margins leave little room for upside surprise. | ||
At $326.08 the stock is 49.6% below the $487.73 analyst target versus 8.0% downside to the stop, a reward-to-risk of 6.2. Estimated upside | Price should close a meaningful part of the gap to the analyst target within 12 months. | →Stable |
| CounterAnalyst targets lag in a falling market, and the stock has not produced a breakout above resistance. | ||
Momentum is only 4.7/10 with price below its 200-day average, flat slope and falling on-base volume, so the chart has not confirmed the fundamental story. Momentum breakdown | Price should reclaim its 200-day average and momentum should rise above 5.5 if the setup resolves upward. | ↓Deteriorating |
| CounterA flat 200-day slope plus distribution volume can mark the start of a deeper decline, and the stock is below its long-term trend. | ||
Supply is concentrated, with 95.0% of a key supplier relationship tied to TSMC plus single-source suppliers, creating a major single point of failure. Bear case | Supply should stay uninterrupted so revenue growth is not constrained by foundry capacity. | ↓Deteriorating |
| CounterA foundry disruption, capacity shortfall or geopolitical event could halt shipments, and the company has limited ability to switch suppliers quickly. | ||
Revenue and earnings growth of 86% YoY is paired with a forward P/E of 16.8x and a PEG of 0.32, making growth cheap relative to earnings.
→StableValuation breakdown
- Expectation
- Growth should stay high enough to keep the PEG below 1.0 as earnings compound.
CounterGrowth of 86% is unlikely to persist, and a PEG built on peak growth rates flatters valuation if growth normalizes.
Broadcom is a high-quality compounder with excellent ROE of 44%, strong margins of 43%, a wide economic moat and a Rule of 40 score of 120.
→StableQuality breakdown
- Expectation
- Returns and margins should hold near current levels over 12 months, sustaining the quality score near 9.2.
CounterFree cash flow converts only 80% of net income, an earnings-quality warning, and peak margins leave little room for upside surprise.
At $326.08 the stock is 49.6% below the $487.73 analyst target versus 8.0% downside to the stop, a reward-to-risk of 6.2.
→StableEstimated upside
- Expectation
- Price should close a meaningful part of the gap to the analyst target within 12 months.
CounterAnalyst targets lag in a falling market, and the stock has not produced a breakout above resistance.
Momentum is only 4.7/10 with price below its 200-day average, flat slope and falling on-base volume, so the chart has not confirmed the fundamental story.
↓DeterioratingMomentum breakdown
- Expectation
- Price should reclaim its 200-day average and momentum should rise above 5.5 if the setup resolves upward.
CounterA flat 200-day slope plus distribution volume can mark the start of a deeper decline, and the stock is below its long-term trend.
Supply is concentrated, with 95.0% of a key supplier relationship tied to TSMC plus single-source suppliers, creating a major single point of failure.
↓DeterioratingBear case
- Expectation
- Supply should stay uninterrupted so revenue growth is not constrained by foundry capacity.
CounterA foundry disruption, capacity shortfall or geopolitical event could halt shipments, and the company has limited ability to switch suppliers quickly.
Per-dimension breakdown
Quality
9.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 10.0 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 8.5 |
| FCF quality | 6.0 |
| Moat | 8.2 |
| Rule of 40 | 9.5 |
| Piotroski F | 10.0 |
- ▸Excellent ROE: 44%
- ▸Strong margins: 43%
- ▸Earnings quality warning: 80% FCF/NI
- ▸Wide economic moat
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 86% YoY
Momentum
1.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 1.5 |
| Volume | 2.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.3 |
| Analyst rating | 9.0 |
| Price target | 9.7 |
- ▸Analyst upside: 60%
Insider
6.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.1 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $250,006,184 (0.016% of mkt cap)
Peer rank
5.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.4 |
| quality rank | 9.0 |
| growth rank | 7.9 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.5 |
| support resistance | 7.8 |
| 52w position | 3.5 |
| gap | 5.0 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.4 |
| days to cover | 8.5 |
| volatility | 2.8 |
| put call | 7.3 |
| implied vol | 3.8 |
| max pain risk | 3.0 |
| beta | 5.0 |
| debt equity | 7.4 |
| news risk | 3.0 |
- ▸Above max pain $265
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.7 |
| dividend safety | 6.8 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Growth is cheap relative to earnings, but the technical setup has not yet produced a breakout above resistance (PEG 0.32, quality 9.2/10, growth 10.0/10).
Engine technical detail
verdict_path:
L4:PATH_C2_GARP_WAIT|ENTRY_STICKY:WITHIN_BANDPassed (6)
- ASYMMETRY:6.0>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:36d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:1.8<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
6.01
Upside
+46.8%
Downside
7.8%
Sizing output
STARTER
SetupRange Bound — RSI 44 mid-range, Bollinger mid-band
EdgeTemporary headwind — High quality (9.2) with weak momentum (1.8)
SuitabilityAggressive — Beta 1.51>1.3
Investment implication
The C-path quality+growth combination triggered the STRONG_BUY_WAIT verdict: quality 9.2 and growth 10.0 both clear their thresholds, with asymmetric R:R of 6.01 supporting the read.
The strongest dimensions are Growth at 10.0, Quality at 9.2, and Sentiment at 8.0; the weakest are Momentum at 1.8, Risk (lower is worse) at 5.6, and Technical at 5.7. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 6.01 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Elite Quality Wide Moat
Trip ifOperating margin falls below 35% from current level of roughly 43%.
- P2Hypergrowth At Reasonable Valuation
Trip ifRevenue growth falls below 30% YoY, pushing PEG above 1.0 from current 0.32.
- P3Analyst Upside Favorable Asymmetry
Trip ifUpside to the analyst target falls below 15% from current 49.6%.
- P4Weak Trend Technical Setup
Trip ifMomentum score exceeds 6.0 from current 4.7 with price above the 200-day average.
- P5Tsmc Supplier Concentration
Trip ifShare of supply tied to TSMC falls below 60% from current 95.0%.