Discounted Cash Flow (DCF) Analysis Unlevered

Broadcom Inc. (AVGO)

$590.99

-7.59 (-1.27%)

All numbers are in Millions, Currency in USD

Stock DCF: 1,058.59 | 590.99 | undervalue

Operating Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	20,848	22,597	23,888	27,450	33,203	37,351.03	42,017.28	47,266.48	53,171.46	59,814.14
Revenue (%)
EBITDA	8,884	9,466	11,124	14,691	19,155	18,098.87	20,359.95	22,903.51	25,764.84	28,983.63
EBITDA (%)
EBIT	4,803	3,658	4,219	8,650	14,171	9,791.91	11,015.21	12,391.33	13,939.37	15,680.81
EBIT (%)
Depreciation	4,081	5,808	6,905	6,041	4,984	8,306.96	9,344.75	10,512.18	11,825.46	13,302.81
Depreciation (%)

Balance Sheet Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Total Cash	4,292	5,055	7,618	12,163	12,416	11,694.73	13,155.75	14,799.29	16,648.16	18,728.01
Total Cash (%)
Account Receivables	3,390	3,259	2,297	2,071	2,958	4,239.49	4,769.13	5,364.93	6,035.17	6,789.14
Account Receivables (%)
Inventories	1,124	874	1,003	1,297	1,925	1,791.40	2,015.20	2,266.95	2,550.16	2,868.75
Inventories (%)
Accounts Payable	811	855	836	1,086	998	1,354.76	1,524	1,714.40	1,928.58	2,169.51
Accounts Payable (%)
Capital Expenditure	-635	-432	-463	-443	-424	-731.08	-822.42	-925.16	-1,040.74	-1,170.76
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 590.99
Beta	1.131
Diluted Shares Outstanding	423
Cost of Debt
Tax Rate	7.55
After-tax Cost of Debt	4.07%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.855
Total Debt	39,515
Total Equity	249,988.77
Total Capital	289,503.77
Debt Weighting	13.65
Equity Weighting	86.35
Wacc

Build Up Free Cash

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	20,848	22,597	23,888	27,450	33,203	37,351.03	42,017.28	47,266.48	53,171.46	59,814.14
EBITDA	8,884	9,466	11,124	14,691	19,155	18,098.87	20,359.95	22,903.51	25,764.84	28,983.63
EBIT	4,803	3,658	4,219	8,650	14,171	9,791.91	11,015.21	12,391.33	13,939.37	15,680.81
Tax Rate	-169.72%	-22.37%	-21.16%	0.43%	7.55%	-41.06%	-41.06%	-41.06%	-41.06%	-41.06%
EBIAT	12,954.89	4,476.37	5,111.85	8,612.92	13,100.82	13,812.05	15,537.58	17,478.69	19,662.29	22,118.69
Depreciation	4,081	5,808	6,905	6,041	4,984	8,306.96	9,344.75	10,512.18	11,825.46	13,302.81
Accounts Receivable	-	131	962	226	-887	-1,281.49	-529.64	-595.80	-670.24	-753.97
Inventories	-	250	-129	-294	-628	133.60	-223.80	-251.76	-283.21	-318.59
Accounts Payable	-	44	-19	250	-88	356.76	169.25	190.39	214.18	240.94
Capital Expenditure	-635	-432	-463	-443	-424	-731.08	-822.42	-925.16	-1,040.74	-1,170.76
UFCF	16,400.89	10,277.37	12,367.85	14,392.92	16,057.82	20,596.80	23,475.73	26,408.54	29,707.75	33,419.12
WACC
PV UFCF						19,035.86	20,052.32	20,847.91	21,675.08	22,535.06
SUM PV UFCF										104,146.22

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.20
Free cash flow (t + 1)	34,087.50
Terminal Value	549,798.41
Present Value of Terminal Value	370,738.06

Intrinsic Value

Enterprise Value	474,884.29
Net Debt	27,099
Equity Value	447,785.29
Shares Outstanding	423
Equity Value Per Share	1,058.59