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Broadcom (NASDAQ:AVGO) Reports Solid Q3-2022 Results; Here are the Numbers
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Broadcom (NASDAQ:AVGO) Reports Solid Q3-2022 Results; Here are the Numbers

Story Highlights

Broadcom’s Fiscal Q3-2022 results came in better than expected both in terms of earnings per share and revenue. Similarly, the company issued guidance that was ahead of expectations. Analysts are also unanimously bullish on the stock, and it’s easy to see why.

After market close today, semiconductor giant Broadcom (NASDAQ: AVGO) released its Fiscal Q3-2022 earnings results. Both earnings per share (EPS) and revenue came in stronger than expected. The company’s Q4 guidance also came ahead of market expectations. As a result, the stock is trending slightly higher in the after-hours session.

Broadcom’s revenue of $8.46 billion grew 25% on a year-over-year basis, beating the consensus estimate of about $8.41 billion. AVGO’s earnings per share came in at $9.73, beating the $9.56 estimate, and its Q3 non-GAAP net income was $4.24 billion, better than the ~$3.12 billion gain in the same quarter last year.

In addition, Broadcom’s free cash flow (FCF) margin was 51%, resulting in FCF of about $4.31 billion for the quarter, much higher than the $3.43 billion recorded last year. The company ended the quarter with nearly $10 billion in cash & cash equivalents but with $39.5 billion in debt.

In addition, AVGO’s upbeat revenue guidance definitely pleased investors. For Q4, AVGO is projecting revenue of $8.9 billion, implying 20% year-over-year growth at the midpoint. Analysts were expecting Q4 revenue to come in at $8.72 billion. Also, the company expects its EBITDA margin to be 63% in Q4.

What is AVGO Stock’s Price Target?

Turning to Wall Street, Broadcom stock earns a Strong Buy consensus rating based on four unanimous Buy ratings assigned in the past three months. The average AVGO stock price prediction of $660 implies 34.1% upside potential.

Broadcom’s Dividend Prospects Look Enticing

Broadcom currently pays a relatively-high dividend, especially for a tech stock; its yield comes in at around 3.3%. Also, its nearly 35% five-year dividend compound annual growth rate (CAGR) makes it an enticing dividend-growth stock. With a free cash flow payout ratio hovering around the mid-40% range, Broadcom’s dividend seems safe, and there is plenty of room for further dividend increases.

The company should also benefit from the long-term growth trajectory of the semiconductor industry, which will aid its dividend growth.

Conclusion: Broadcom’s Solid Q3 Results Pleased Investors

Broadcom’s results were better than expectations in every aspect. This caused the stock to rally in the after-hours trading session (although only slightly). AVGO looks like a solid, high-growth dividend stock. It also has the backing of analysts, who are unanimously bullish on the stock. Therefore, it is one worth considering.

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