Asi no hay quien añada
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Broadcom’s Broad-Based Momentum Continuing Into Early 2022; Raising FVE to $500
Broadcom reported strong fourth-quarter results ahead of our expectations. The firm’s results were buoyed by healthy networking demand led by cloud data center spending and sharp wireless growth. Broadcom’s product portfolio is well tailored to address the work-from-home environment and we expect continued double-digit top-line growth next quarter, especially as enterprises resume infrastructure technology spending consistent with the COVID-19 recovery. We remain positive on Broadcom’s networking, storage, and broadband business units, and we applaud the firm’s integration efforts of its software acquisitions such as Symantec and CA Technologies. Management is optimistic that recent tailwinds will continue into 2022, with robust bookings and lean inventories. Consequently, we are raising our fair value estimate to $500 per share from $400 as we roll our model forward and incorporate stronger top-line growth as well as operating leverage. Shares rose 6% during after-hours trading and are trading close to our bull case valuation. We recommend prospective investors wait for a wider margin of safety before investing in narrow-moat Broadcom.
Fiscal fourth-quarter sales were $7.4 billion, up 15% year over year. Semiconductor solutions revenue was $5.6 billion, which was up 17% year over year. Demand for networking products continued to be solid, growing 13% year over year thanks to next-generation Tomahawk and Trident switch products at cloud customers and Jericho at telecom customers. Wireless revenue was up 32% year over year as Broadcom benefited from Apple’s iPhone 13 and associated increase in 5G RF content. Infrastructure software revenue came in at $1.8 billion, which was up 8% year over year. While we aren’t expecting material growth from this segment, we note it is a strong cash-flow generating and high-margin business, with over 90% of bookings representing recurring subscription and maintenance during the quarter.
Fair Value and Profit Drivers
12/09/2021
Our fair value estimate for Broadcom is $500 per share and implies a fiscal 2022 non-GAAP price/earnings ratio of 16 times. With the inclusion of CA Technologies and Symantec, as well as a rebound in wireless revenue thanks to new 5G devices that contain higher RF content from Broadcom, fiscal 2021 revenue grew 15%. We expect strong networking demand to continue into 2022, with overall sales poised to grow another 10%. Thereafter, we anticipate average top-line growth in the mid-single digits in line with management’s expectations.
While each of Broadcom’s core segments is poised to grow, we view the firm’s networking business most favorably. Broadcom sells solutions that cater to the plumbing in data center, telecom, and networking applications, including Ethernet switching and routing products and custom chips for the likes of Cisco and cloud vendors. We foresee this portion of wired infrastructure (40%) growing around 10% as the firm benefits from the shift to the cloud. The other 60% stems from broadband access and set-top box solutions that deliver data to the home. We think this part of the business will achieve low-single-digit growth rates. Wireless communications contributed 34% of fiscal 2021 semiconductor sales, as Broadcom is the leader in FBAR RF filters and Wi-Fi/Bluetooth connectivity chips for flagship devices such as the Apple iPhone and Samsung Galaxy. Although we don’t anticipate major unit growth in smartphones, we do foresee healthy content gains attributed to a greater need for advanced filters in 5G devices. Although seasonality, product mix, and excess inventory builds tend to fuel lumpiness in this segment, we do think it will grow in the coming years.
We expect infrastructure software sales to be about $7.5 billion in fiscal 2022. This segment includes Brocade, CA Technologies, and Symantec. While we aren’t expecting material growth from this segment, we note it is a strong cash flow generating and high-margin business. In the coming years, we see GAAP gross margins reaching the mid-60s as Broadcom has done well paring most of the margin dilutive businesses acquired through its M&A tear. GAAP operating margins should approach 40% in the coming years, given the firm’s proclivity for identifying realizable cost synergies across the bevy of market-share-leading franchises from its M&A.
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En Marzo de 2020 se podían haber añadido AVGO a 150$ 
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Broadcom’s Positive Momentum Looks Likely To Continue Through Rest of 2022; Raising FVE to $545
Broadcom reported strong fiscal first-quarter results ahead of our expectations. The firm’s results were buoyed by healthy networking demand led by cloud and enterprise data center spending. Broadcom’s product portfolio is well tailored to address the work-from-home environment and we expect continued double-digit year-over-year revenue growth next quarter, especially as enterprises maintain infrastructure technology spending consistent with the COVID-19 recovery. We remain positive on Broadcom’s networking, storage, and broadband business units, and we applaud the firm’s integration efforts of its software acquisitions such as Symantec and CA Technologies. Management is optimistic that recent tailwinds will continue over the course of 2022, with robust bookings and lean inventories. Consequently, we are raising our fair value estimate to $545 per share from $500 as we incorporate stronger top-line growth as well as operating leverage. We recommend prospective investors wait for a wider margin of safety before investing in narrow-moat Broadcom.
First-quarter sales were $7.7 billion, up 16% year over year. Semiconductor solutions revenue was $5.9 billion, which was up 20% year over year. Demand for networking products continued to be solid, growing 33% year over year thanks to next-generation Tomahawk and Trident switch products at cloud customers and Jericho at telecom customers. Server storage connectivity sales grew 32% year over year thanks to the continued recovery in enterprise IT spending. Wireless revenue was up 5% year over year as Broadcom benefited from Apple’s iPhone 13 and associated increase in 5G RF content. Infrastructure software revenue came in at $1.8 billion, which was up 5% year over year. While we aren’t expecting material growth from this segment, we note it is a strong cash-flow generating and margin accretive business, with over 90% of bookings representing recurring subscription and maintenance during the quarter.
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Seria muy buena compra desde mi punto de vista, el mejor software de virtualización sin duda.
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De momento le está sentando bien a unos (VMW +23%) y mal a otros (AVGO -5%)
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A ver si sigue cayendo. Esto ya es un classical Broadcom, gran adquisición que conlleva tensionar la empresa y entonces nos llegan las buenas RPDs iniciales a la cotización. Ya por encima del 3%, pero a ver si la conseguimos ver más cerca del 4%.
Y esta es de esas rarezas que suele ofrecer una buena RPD inicial con crecimiento de doble dígito.
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yo llevo uno meses con ella en el radar esperando que llegase a un 3% de RPD y creo que voy a hacer entrada ya en ella. Sector con futuro,empresa de gran crecimiento,buen retorno y alto crecimiento del dividendo…a largo plazo creo que será una gran compra
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A mi me gusta la compra y a los amigos de la Estrella de la Mañana también
Analyst Note 05/23/2022
On May 22, Bloomberg reported Broadcom is in talks to acquire VMware in a cash and stock deal. No deal price was provided, but based on VMware’s market capitalization of about $40 billion and typical M&A premiums, we think a potential deal would be at least $50 billion. Given that VMware is trading at a discount to our $175 fair value estimate, we think Broadcom shareholders would be getting a good deal, and we suspect Broadcom’s management is trying to take advantage of the recent technology sector selloff and VMware’s transition from a licensing to a subscription model that have pressured shares.
Broadcom’s foray into enterprise software has picked up steam over the past four years as it bought CA Technologies and Symantec’s enterprise business. VMware’s data center virtualization business could fit nicely with Broadcom’s existing software offerings tailored to enterprises. VMware’s collection of software-as-a-service sales would also go well with Broadcom’s own subscription-based revenue. If the deal is successful, we think Broadcom’s breadth of software offerings could be used to increase switching costs for enterprise customers and thus strengthen Broadcom’s narrow economic moat.
Our initial take on this potential deal is positive from a strategic perspective, and we are maintaining our $545 fair value estimate. Shares were lower by about 2% on the news, as we suspect investors are cautious on the additional debt that Broadcom may need to take on to finance a potential deal, particularly in a rising interest rate environment. We recommend prospective investors wait for a wider margin of safety before committing capital to Broadcom.
Although Broadcom has been enjoying robust networking chip demand from cloud and enterprise customers amid the ongoing chip shortage, we view the firm’s mission-critical software franchises as strong cash flow generating and margin accretive. Management expects Broadcom’s software segment to achieve organic sales growth above 5%.
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The deal is expected to be completed in Broadcom’s fiscal year 2023.
Broadcom expects to maintain its current dividend policy. 
VMW cotizando sobre los 122$ en pre-market.
Under the terms of the deal, VMW holders can elect to receive $142.50 in cash or 0.2520 share of Broadcom common stock for each VMware share 
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¿Ya las has recomprado?
Estuve a punto de caramelo hace un par de días pero finalmente opté por otra que no paga dividendo 
Si baja de 500$ no habrá más remedio que devolverla al redil.
Tentado estoy de meterle a VMWare y sacar un 15% en menos de un año … teóricamente.
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Así se explica lo de comer tantas hierbas 
. Tanto comprar Spotify no debe ser bueno para la alimentación… 
Culebrón a la vista
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¿Compro AVGO o VMW?
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