Where Will Broadcom Stock Be in 1 Year? | AVGO Stock Prediction | AVGO Stock Analysis

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브로드컴(AVGO)은 AI·반도체 성장으로 2023년 급등했으며, 2024년 주당순이익 4.64달러 추정치에 PER 32를 적용해 주가 약 1,487달러(±50달러 범위 1,450~1,550)를 제시. 현재가 1,220달러 대비 약 20% 상승 시나리오가 가장 개연성 있다고 봄. 영업이익률 45.93%, 규모의 경제 강조.

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01. hey everyone broadcom shares surged more than 100% in 2023 could a similar Trend be waiting for shareholders in 2024 well in this video I'm going to answer where I think broadcom stock could be in 2024 I'm going to use several estimates assumptions and forecasts to make this stock price prediction so follow along and let me know what you think of this price prediction right like I mentioned broadcom stock has exploded in the recent year you can see it jumping from a little over $600 a share all the way up over $1,220 a share as broadcom is starting to e growth in the semiconductor industry so one of the pre predictions I'm going to need or s the price which is $1,220 per share as of this recording I'm also going to need broadcom's PE ratio which currently is 37.4 near the most expensive this stock has been all year long PE ratio of 37 I also need to get Wall Street estimates for where broadcom's earnings per share could be in 2024 which ends in October of 2024 for broadcom it's on a fiscal year that's different from a calendar year companies are allowed to do that although it's annoying for financial analysts like myself but they are allowed to have a fiscal year that's different from the calendar year and broadcom is one of those companies analysts on Wall Street expect broadcom to deliver earnings per share of $46 49 in 2024 they expect that to grow by 20% to $558 in 2025 and another 10% in 2026 to $61.50 per share but what I'm going to use in this video is the $464 prediction to make my stock price prediction for 2024 although I am going to incorporate the prospects for 2025 and 2026 to consider what valuation investors would be willing to pay for broadcom stock so if broadcom does indeed deliver $464 earnings per share in 2024 and the price to earnings Remains the Same at 37 as we saw in this example here then broadcom stock could be $1,720 in 2024 although I don't think this scenario is the most most likely scenario I've got three other scenarios I'd like to propose what if its price to earnings ratio Falls to 32 and it earns the $464 well in that case broadcom stock price could be $1,487 per share in a more enthusiastic scenario if broadcom's price to earnings Rises to 45 its stock price could explode higher to $2,092 per share and in a worst case scenario if its price to earnings Falls to 25 then broadcom stock price could fall to $1,162 per share which would not be that much below the $1,220 per share it's currently trading at so if broadcom does indeed hit this earnings per share Target then the valuation has more upside than downside in my opinion however for my perspec perspective the most likely scenario out of these four that I've highlighted is for broadcom's price to earnings to fall to 32 with an estimated stock price around $1,487 per share that would be higher than where it's at now the $1,220 per share so about a roughly 20% increase for broadcom in 2024 which would be a solid increase to be sure but nowhere near the more than doubling it experienced in 2023 now although I do believe there is upside to broadcom stock this is just my most probable scenario that I've predicted for broadcom now broadcom if you think about it's demonstrated excellent economies in scale economies in scale is one of the most desirable characteristics you can find in an investment in the example I have created here sales grow from 100 in year 1 to $115.7 in year four while net income more than doubles from $4.50 to $947 in year four this company demonstrates economies in scale as its Revenue grows its profits grow by a larger magnitude not every company can achieve this kind of effective growth here's how it works this is a typical categorization of an income statement of a publicly traded company cost of goods sold is what's called a variable expense that means cost of goods sold is connected to sales other expenses like interest General and admin and depreciation are not connected to sales you can see here depreciation stays the same at 25 whether sales increase or not the same is true for interest expense it stays the same whether sales grows or not you can understand your interest payments do not in increase when your sales increase overall businesses typically have a mixture of fixed expenses that are unrelated to sales and variable expenses that are when sales increase the business leverages those fixed expenses as we see in this example and profits grow by a larger magnitude than the increase in sales okay so now that you understand the importance of economies and scale you can see broadcom increasing its operating profit margin in the last decade all the way up to 45.93 up from around 12 13 15% in 2015 now some of that was helped by Acquisitions most notably the recent acquisition of VMware and its namesake broadcom acquisition in 2016 still the company has done a good job digesting those Acquisitions and making them earnings creative some companies make make Acquisitions and it actually hurts their profit margins because they don't incorporate that acquisition well they don't digest it well and it ends up becoming a big mess and not being positive to earnings overall but broadcom has done a solid job incorporating its Acquisitions and building on its profit margin Wall Street thinks its profit margin will continue to remain elevated for the next two years and so they don't think this is going to drop back down that's partly why I think the stock price will increase in 2024 because its earnings per share will increase its profit margin will remain elevated and its prospects over the next two years will remain solid so for all of those reasons I think broadcom stock will be around $1,487 per share but as usual when I'm making these predictions I'd like to give a range that's more accurate than trying to be precise so the range I would give for broadcom stock would be between 14 $150 per share to $1,550 per share that $100 range to make the case for in case it's a little bit better a little bit worse and it increases your chances of being within that Target instead of trying to be more precise which is not a smart thing to do which is not a prudent thing to do I should say when you're making an estimate about the future because I'm using several assumptions several estimates as you just saw me do and nobody knows what's going to happen in the future and so it's better to when you're making a prediction to give yourself a range of outcomes rather than trying to be precise