> ## Content Index > Fetch the complete content index at: https://www.altamiraequity.com/llms.txt > Use this file to discover other available public pages before exploring further. # Broadcom: The Growth Record Printed Real — the Fair-Value Models Can't Agree on the Price - URL: https://www.altamiraequity.com/avgo-company-insights-2026-11/ - Published: 2026-11-13T18:15:56.000Z - Updated: 2026-11-13T18:15:56.000Z - Description: Broadcom grew revenue 85.50% year over year to $29.59B in its latest quarter and expanded operating margin 1,736 basis points to 54.27%. The stock trades 43.94% below the one published fair value that has followed it longest (Morningstar, $650.00) and 48.26% above another (Altamira's in-house DCF, $ - Author: Altamira Capital - Tags: Research, Company Insights, Technology, AVGO, #qc-pass *Revenue +85.50% YoY to $29.59B · operating margin +1,736 bp to 54.27% · ROIC 24.03% (TTM) · close 364.36, 43.94% below the Morningstar fair value of 650.00 and 48.26% above the Altamira in-house DCF of 245.75* ### The story in 30 seconds - Broadcom's latest filed quarter is one of the fastest-growing prints in the KPI Scorecard universe: revenue of $29.59B grew 85.50% year over year, operating margin expanded 1,736 basis points to 54.27%, and free cash flow of $13.66B ran at 104.41% of net income. - The price says something more divided. At the November 12 close of 364.36, the stock sits 43.94% below the one published fair value that has tracked it longest (Morningstar, $650.00) — but 48.26% above Altamira's own in-house DCF ($245.75) and 107.53% above FMP's DCF ($175.57). The three models the scorecard carries for Broadcom span from $175.57 to $650.00. - The open question is whether the technical score of 20.0 — the weakest cell on an otherwise mid-to-strong fundamental profile — is pricing the two DCF models' caution, or has simply fallen behind a growth and margin record that just printed its strongest quarter yet. Broadcom's fundamental composite on the Altamira KPI Scorecard is 68.4, built from a value pillar of 73.8, a growth pillar of 72.1 and a quality pillar of 70.6 — a solid, if not top-tier, profile. The same edition scores the stock's technical state at 20.0 and labels it DRIFTING, tier 4, grade C, a blended total of 53.9\. A reader looking only at the quarter just filed — 85.50% revenue growth, 1,736 basis points of margin expansion, cash conversion above net income — would call this one of the stronger growth prints on the sheet; a reader looking only at the scorecard's blended grade would call it a C. Both readings use real numbers, and the gap between them is largely the fair-value disagreement below. Broadcom sells semiconductor solutions — custom silicon, networking chips and connectivity components — and enterprise infrastructure software, organized into Wired Infrastructure, Wireless Communications, Enterprise Storage and Industrial & Other segments. A 8-K filed July 6, 2026 disclosed that Broadcom and Apple had agreed to expand their technology collaboration through 2031, covering custom ASIC silicon products across multiple generations of Apple products — one data point behind the growth and margin trajectory the five-year record below shows building for several years. In this post: (1) how the business made money in the latest filed quarter; (2) the five-year record across four lenses; (3) what the cash and share-count lines say about the quality of the earnings; (4) what the price already assumes against three published fair-value models; (5) the scorecard's own read, pillar by pillar; (6) the honest counterweight and the Key Issue ahead of the December 9 print. ### How Broadcom makes money ![Broadcom Q3 FY2026 income flow: how the latest quarter's revenue became operating income and free cash flow. Source: FMP income and cash-flow statements.](https://www.altamiraequity.com/content/images/2026/11/AVGO-2026-11-13-income_flow.png) Broadcom Q3 FY2026 income flow: how the latest quarter's revenue became operating income and free cash flow. Source: FMP income and cash-flow statements. In the latest filed quarter, Q3 FY2026 (period ended August 2, 2026): revenue of $29.59B, up 85.50% year over year and 33.37% sequentially. Cost of revenue was $9,135.0M (30.87% of revenue), leaving a gross profit of $20.46B (69.13%). Operating expenses were $4,398.0M (14.86%) — R&D of $2,895.0M (9.78%), SG&A of $996.0M (3.37%) and other expenses of $507.0M (1.71%) — producing operating income of $16.06B, a 54.27% operating margin, up 172.77% year over year. Interest expense was $778.0M (2.63%); pre-tax income was $15.28B (51.62%); income tax of $2,187.0M (7.39%) left net income of $13.09B, a 44.23% net margin, up 216.14% year over year. Free cash flow was $13.66B, 46.18% of revenue. The swing line is operating margin itself: up 532 basis points sequentially and 1,736 basis points year over year, even as free-cash-flow margin held almost flat quarter over quarter (−7 bp) — the quarter's growth did not come at the expense of cash conversion. ### The long view — FY2020 to FY2025 ![Broadcom, FY2020–FY2025: revenue, margins and returns on capital. Source: FMP annual statements.](https://www.altamiraequity.com/content/images/2026/11/AVGO-2026-11-13-long_view.png) Broadcom, FY2020–FY2025: revenue, margins and returns on capital. Source: FMP annual statements. - **Revenue growth.** $23.89B in FY2020 to $63.89B in FY2025, a 21.74% compound rate. The path was not linear — FY2024 revenue of $51.57B was a large step up from FY2023's $35.82B — and the most recent quarter's 85.50% year-over-year growth runs well above the five-year average pace. - **Operating margin.** 16.80% in FY2020 to a FY2023 peak of 45.25%, then a trough of 26.10% in FY2024, before recovering to 39.89% in FY2025 — a net expansion of 2,309 basis points across the five years, with the FY2024 dip and recovery the most volatile stretch in the record. The latest quarter's 54.27% sits above every one of those five annual figures. - **Cash.** Free-cash-flow margin ran near 49% in FY2021 through FY2023, fell to 37.64% in FY2024 — the same year operating margin troughed — and recovered to 42.13% in FY2025; free cash flow compounded at 18.34% a year, below the 21.74% revenue rate. - **Returns on capital.** ROIC fell from 19.71% in FY2022 to a trough of 5.57% in FY2024, then recovered to 16.36% in FY2025 — the sharpest round-trip of the four lenses, now at 24.03% on a trailing-twelve-month basis, above every one of the five annual figures shown here. ### Quality of earnings Free cash flow of $13.66B in the latest quarter was 104.41% of net income — cash generation outran the accounting earnings line, with operating cash flow of $14.20B funding just $532.0M of capital expenditure. Diluted share count was 4,887,000,000, up 0.56% year over year and 0.23% sequentially — modestly rising rather than falling, against dividends paid of $3,103.0M and no buybacks in the quarter ($0.0M). The balance sheet carries a structural feature worth naming plainly: goodwill and intangibles of $124.13B exceed the company's entire $99.69B of shareholders' equity, a legacy of Broadcom's acquisition history (VMware prominent among them), alongside cash and short-term investments of $23.98B against total debt of $59.42B and net debt of $35.44B. None of this is a red flag on its own — the trailing net debt/EBITDA of 0.68 is modest — but a balance sheet where intangible assets outweigh equity is not a pure-asset story. ### Valuation — what the price already says ![Broadcom: the last close against each published fair value. Source: Altamira KPI Scorecard fair-value cells as published; FMP daily close.](https://www.altamiraequity.com/content/images/2026/11/AVGO-2026-11-13-valuation.png) Broadcom: the last close against each published fair value. Source: Altamira KPI Scorecard fair-value cells as published; FMP daily close. At the November 12, 2026 close of 364.36, the three fair-value figures the KPI Scorecard carries for Broadcom disagree about which side of fair the stock sits on: | Source | Fair value | As of | Price vs fair value | Fair value vs price | | ---------------------- | ---------- | ---------- | ------------------- | ------------------- | | FMP DCF | 175.57 | 2026-11-07 | +107.53% | −51.81% | | Altamira 10-year DCF | 245.75 | n/a | +48.26% | −32.55% | | Morningstar fair value | 650.00 | 2026-06-04 | −43.94% | +78.39% | The published range runs from 175.57 to 650.00\. Two of the three models — both DCF-based — put the current price above their own fair-value estimate; the third, Morningstar's, puts the price 43.94% below it, for a margin of safety of 46.89% on that single model. Fair value is stated as published in the dataset; analyst price targets are excluded from this comparison (R7). On a trailing basis the stock trades at a P/E of 45.21 with a free-cash-flow yield of 2.27% and ROIC of 24.03%. ### The scorecard read ![Broadcom: the six KPI scorecard pillars. Source: Altamira KPI Scorecard.](https://www.altamiraequity.com/content/images/2026/11/AVGO-2026-11-13-scorecard.png) Broadcom: the six KPI scorecard pillars. Source: Altamira KPI Scorecard. The November 12, 2026 edition of the Altamira KPI Scorecard has Broadcom at a fundamental composite of 68.4 — value 73.8 and growth 72.1 the strongest pillars, quality 70.6 and moat 68.2 a step behind, shareholder 59.1 and health 59.0 the weakest two. The technical score is 20.0, producing a blended total of 53.9, tier 4, grade C, state DRIFTING, rank 239 with a one-day delta of +1.5\. The technical score sits well below all six fundamental pillars; that gap is the single largest reason the blended total sits far below the fundamental composite. ### The honest counterweight Three cells argue against reading this quarter's growth and margin print as settling the valuation question. - **Two of three published fair-value models say the stock is already expensive.** FMP's own DCF (175.57) and Altamira's in-house DCF (245.75) both sit below the 364.36 close; only Morningstar's figure (650.00), last updated June 4, 2026, argues the stock is cheap. A reader who trusts the DCF models over Morningstar's would reach the opposite conclusion from the deck line above. - **Goodwill and intangibles exceed shareholders' equity.** $124.13B against $99.69B of equity is not unusual for a serial acquirer, but it means more than the entire equity base is intangible, a cell worth tracking if growth ever slows enough to pressure an impairment test. - **The technical state is DRIFTING, not merely weak.** A score of 20.0 is the lowest of the six scorecard inputs by a wide margin, and the scorecard's own state label reflects a trend reading, not a single data point. ### The Key Issue Whether the operating-margin and ROIC recovery since the FY2024 trough (26.10% operating margin, 5.57% ROIC) continues into the December 9, 2026 print — consensus revenue of $34.90B (+93.71% YoY implied) and EPS of 3.83 (+96.41% YoY implied) — or whether a FY2024-style compression returns. The trailing ROIC of 24.03% against the FY2025 full-year figure of 16.36% is the specific cell that print will move. ![Broadcom, nine quarters: operating margin climbs to 54.27% in Q3 FY2026 and quarterly revenue reaches $29.59B, with a $34.90B consensus bar for the December 9 print](https://www.altamiraequity.com/content/images/2026/11/avgo-insights-2026-11-keyissue.png) Operating margin by quarter for the last nine quarters, reaching 54.27% in Q3 FY2026, beside quarterly revenue up to $29.59B and the $34.90B consensus for the December 9 print shown as an outlined bar. Source: FMP quarterly income statements and consensus estimates. ### Sources - FMP /stable/earnings (actuals vs consensus, eight quarters), /historical/earning\_calendar/AVGO (report timing), /historical-price-full/AVGO (daily closes; moving averages and ranges computed from them) — pulled November 13, 2026. - FMP /income-statement, /cash-flow-statement, /balance-sheet-statement (quarterly, nine quarters; the Q3 FY2026 statements filed September 10, 2026) and the annual statements plus /key-metrics for FY2020–FY2025 — pulled November 13, 2026. - FMP /analyst-estimates and /key-metrics-ttm — pulled November 13, 2026. - Altamira KPI Scorecard, edition 2026-11-12 (kpi-scorecard-2026-11-12.json): composite, pillar and technical scores, tier, state and fair-value cells as published. Fair value is stated as published in the dataset. - SEC EDGAR, Broadcom Inc. 8-K, Item 8.01, filed July 6, 2026 (Broadcom–Apple technology collaboration through 2031). - Guidance, segment detail and management commentary: NOT STATED — the earnings-call transcript is not in the dataset for this edition. Research for information only — not investment advice; see Disclosures. ### On the data pages - [AVGO company page](https://www.altamiraequity.com/company-avgo/) — the filed figures, margins, cash flow and the print history, from SEC EDGAR. - [AVGO vs NVDA, head to head](https://www.altamiraequity.com/compare/#AVGO-vs-NVDA) — the two on the same scorecard cells (top composite in Technology (kpi-scorecard-2026-11-12.json)). - [Verdict ledger](https://www.altamiraequity.com/verdicts/) — every public call, on the record. - [Earnings schedule](https://www.altamiraequity.com/earnings/) — who reports next, and how every print this season graded.