DCF Studio

    AVGO · NMS · Technology

    Broadcom Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 530.31

    Market price

    USD 322.23

    Implied upside

    +64.6%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-10-31

    Current EV/EBITDA of 45.5x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 530.31+64.6%
    Exit multiple
    USD 844.07+161.9%
    Market price
    USD 322.23

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn158bn317bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 95.8bnUSD 143.7bnUSD 207.1bnUSD 286.0bnUSD 378.1bnUSD 477.4bnUSD 574.3bnUSD 656.9bnUSD 712.3bnUSD 730.1bn+25.3%
    EBITUSD 38.1bnUSD 57.1bnUSD 82.2bnUSD 113.6bnUSD 150.1bnUSD 189.5bnUSD 228.1bnUSD 260.8bnUSD 282.8bnUSD 289.9bn+25.3%
    NOPATUSD 35.2bnUSD 52.8bnUSD 76.0bnUSD 105.0bnUSD 138.8bnUSD 175.2bnUSD 210.8bnUSD 241.1bnUSD 261.5bnUSD 268.0bn+25.3%
    Add depreciation & amortisationUSD 14.1bnUSD 21.2bnUSD 30.5bnUSD 42.1bnUSD 55.6bnUSD 70.2bnUSD 84.5bnUSD 96.7bnUSD 104.8bnUSD 107.4bn+25.3%
    Less capital expenditureUSD -1.1bnUSD -2.7bnUSD -5.4bnUSD -9.6bnUSD -15.5bnUSD -23.1bnUSD -32.0bnUSD -41.4bnUSD -50.2bnUSD -56.8bn+55.1%
    Capex, % of revenue1.1%1.9%2.6%3.4%4.1%4.8%5.6%6.3%7.0%7.8%-
    Less increase in working capitalUSD -3.6bnUSD -5.4bnUSD -7.1bnUSD -8.9bnUSD -10.3bnUSD -11.1bnUSD -10.9bnUSD -9.3bnUSD -6.2bnUSD -2.0bn-6.3%
    Free cashflow to firmUSD 44.6bnUSD 65.8bnUSD 94.0bnUSD 128.6bnUSD 168.6bnUSD 211.3bnUSD 252.5bnUSD 287.1bnUSD 309.9bnUSD 316.7bn+24.3%
    Discount factor0.95200.86280.78190.70870.64230.58210.52750.47810.43330.3927-
    Present valueUSD 42.5bnUSD 56.8bnUSD 73.5bnUSD 91.2bnUSD 108.3bnUSD 123.0bnUSD 133.2bnUSD 137.3bnUSD 134.3bnUSD 124.4bn-
    Present Value Of The ForecastUSD 1024.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.340Reported 1.508, pulled toward 1.0 (Blume)
    Cost of equity10.56%Risk-free + beta x equity risk premium
    Cost of debt5.44%Risk-free + 55bp, the spread for a AA rating at 8.1x interest cover. Book interest / average debt was lower, at 4.8%.
    Market capitalisationUSD 1538.2bn95.9% of capital
    Total debtUSD 65.1bn4.1% of capital, book value as a proxy
    Tax rate7.6%Effective, capped at statutory
    WACC10.34%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 530.31

    61% of EV

    Forecast FCFF, final year
    USD 316.7bn
    Capex at depreciation, working capital in reinvestment
    USD 358.8bn
    Less reinvestment at g/ROIC (13.3% of NOPAT)
    USD -47.6bn
    Capitalised
    USD 311.2bn
    ROIC (reported)
    18.9%
    Terminal value, undiscounted
    USD 4069.7bn
    Terminal value, discounted
    USD 1598.2bn
    Enterprise value
    USD 2622.6bn
    Less net debt
    USD 49.0bn
    Equity value
    USD 2573.6bn

    Exit at 20.0x EBITDA

    Value per shareUSD 844.07

    75% of EV

    Terminal value, undiscounted
    USD 7947.0bn
    Terminal value, discounted
    USD 3120.9bn
    Enterprise value
    USD 4145.2bn
    Less net debt
    USD 49.0bn
    Equity value
    USD 4096.3bn

    Spread between methods: 46%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.34%705.52726.27751.13781.27818.34
    9.34%597.87609.92624.18641.19661.65
    10.34%515.35522.21530.32539.94551.39
    11.34%450.25453.90458.27463.51469.76
    12.34%397.72399.32401.36403.90407.03

    Outlined: this model. Green text: above today's price of 322.23. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year24.4%27.6%20.9%
    EBIT margin45.9%39.7%19.4%
    Discount rate-10.3%14.2%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.