Is Broadcom Inc (AVGO) overvalued?
On Equity Rank's model estimate, AVGO trades 42% above its fair value. Broadcom Inc (AVGO) last closed at $293.69; the multi-method model fair value is $206.62.
| Price | Model fair value | Price vs model |
|---|---|---|
| $293.69 | $206.62 | 42% above |
What the answer rests on
- 1 of 9 valuation methods put AVGO's value above its price and 8 put it below, so the methods mostly agree.
- To justify today's price, AVGO's free cash flow would need to grow about 24.9% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 18.2% a year.
- Over the past year the price sat below the model fair value on 16% of trading days. The gap ranged from 5% below to 192% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind AVGO's fair value · What prices assume · Other companies