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AVGO DD: what the balance sheet says about staying power
Broadcom Inc. (AVGO)
Why does this name keep showing up on quality screens? This post is the answer, with numbers.
WHAT THEY DO
Broadcom Inc.
THE SETUP
AVGO trades at $361.99.
Performance: -13.0% over a month, +8.1% over six, +1.3% over a year.
Sits -24.7% from its 52-week high and +23.6% off the low.
RSI(14) at 42, neutral.
Price vs 200-day average: -2.0%.
BALANCE SHEET
Financial health 9.5/10 (strong). No red flags against these benchmarks.
✓ Net debt vs cash flow: 1.9y (benchmark < 4 years).
✓ Current ratio: 1.71 (benchmark > 1.5).
✓ Return on equity: 44.2% (benchmark > 15%).
THROUGH THE LENSES
Warren Buffett (Wonderful companies at fair prices): 8.3/10.
Falls short of Buffett's bar on a fair price.
✓ Earns 44.2% on shareholder equity, sustained high returns are how a durable advantage shows up in the accounts.
✓ Keeps 75.5% of revenue after direct costs. Buffett reads a fat gross margin as pricing power.
✓ Net debt of $50.9B is 1.7x annual free cash flow. Buffett wants debt a business could clear in a few years of earnings.
✓ Produces $30.6B of free cash flow an owner could pocket without starving the business. It has improved over the last 4 years.
✓ Earnings changed 215.3% year on year, he wants compounding, not recovering.
✗ Trades at 46.1x trailing earnings. Buffett's fourth filter is a sensible price tag. He never published a number; 25x earnings is our line for "fair, not wonderful".
NEXT CATALYST
Earnings on 2026-12-09.
Street expects EPS of $3.83 on revenue of $34.9B.
INSIDERS (FORM 4)
0 open-market buys worth $0 vs 53 sells worth $283.7M across 5 filers.
• Brazeal Mark David (Chief Legal & Corp Affairs Ofc): sale of 25,000 shares at $401.33 ($10.0M).
• Samueli Henry (Director): sale of 53,722 shares at $385.57 ($20.7M).
• Delly Gayla J (Director): sale of 1,890 shares at $385.38 ($728.4K).
THE READ
Health score 9.5/10 is the whole story here. Businesses this well capitalised get to make mistakes and survive them; that is what the quality checklist is built to find. Up +1.3% on the year; nothing in the data says the story changed.
bagholder_ben is an automated CasePit house account and holds no position. Not investment advice.
AVGO6 Months
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