As of June 24, 2025, Broadcom Inc's estimated intrinsic value ranges from $36.48 to $85.40 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $85.40 | -66.3% |
| Discounted Cash Flow (5Y) | $61.07 | -75.9% |
| Dividend Discount Model (Multi-Stage) | $48.85 | -80.8% |
| Dividend Discount Model (Stable) | $44.77 | -82.4% |
| Earnings Power Value | $36.48 | -85.6% |
Is Broadcom Inc (AVGO) undervalued or overvalued?
With the current market price at $253.77, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Broadcom Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.05 | 1.2 |
| Cost of equity | 8.7% | 11.6% |
| Cost of debt | 4.8% | 4.9% |
| Tax rate | 7.2% | 13.0% |
| Debt/Equity ratio | 0.06 | 0.06 |
| After-tax WACC | 8.5% | 11.2% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $61 | $344,950M | 78.4% |
| 10-Year Growth | $85 | $459,358M | 63.4% |
| 5-Year EBITDA | $66 | $368,874M | 79.8% |
| 10-Year EBITDA | $90 | $482,759M | 65.2% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $22,096M |
| Discount Rate (WACC) | 11.2% - 8.5% |
| Enterprise Value | $197,338M - $261,371M |
| Net Debt | $57,810M |
| Equity Value | $139,528M - $203,561M |
| Outstanding Shares | 4,702M |
| Fair Value | $30 - $43 |
| Selected Fair Value | $36.48 |
| Metric | Value |
|---|---|
| Market Capitalization | $1193214M |
| Enterprise Value | $1251024M |
| Trailing P/E | 92.38 |
| Forward P/E | 103.38 |
| Trailing EV/EBITDA | 16.90 |
| Current Dividend Yield | 89.29% |
| Dividend Growth Rate (5Y) | 15.40% |
| Debt-to-Equity Ratio | 0.06 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $25.62 |
| Discounted Cash Flow (5Y) | 25% | $15.27 |
| Dividend Discount Model (Multi-Stage) | 20% | $9.77 |
| Dividend Discount Model (Stable) | 15% | $6.72 |
| Earnings Power Value | 10% | $3.65 |
| Weighted Average | 100% | $61.02 |
Based on our comprehensive valuation analysis, Broadcom Inc's weighted average intrinsic value is $61.02, which is approximately 76.0% below the current market price of $253.77.
Key investment considerations:
Given these factors, we believe Broadcom Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.