Broadcom's moat and management scores, 99 and 98, point to a business with rare durability and disciplined capital use. That reading is backed by a 16.4% return on invested capital, a 67.8% gross margin, and debt to equity of only 0.8x. This is a company whose historical growth rate of 22.0% exceeds the 15.0% figure the model actually uses, a deliberate act of conservatism rather than a sign the business is slowing.
The margin of safety score of 22 tells a different story about price. Consensus buy price sits at $106.90, built from a payback time of eight years of free cash flow, against a current price of $416.08. The stock trades at 69.3 times earnings while throwing off a free cash flow yield of just 1.6%.
The tension is straightforward: the underlying business scores near the top of the range on quality and capital discipline, while the price sits far above every valuation anchor calculated from that same business, from the $67.72 ten-cap price to the $90.00 margin of safety price.
| Price | $357.61 |
| Market cap | $1.7T |
| P/E ratio | 45.7x |
| Return on invested capital | 16.4% |
| Gross margin | 67.8% |
| Debt to equity | 0.80x |
| Free cash flow yield | 1.6% |
| Growth rate used | 15.0% |
| Growth rate measured | 22.0% |
| Exit multiple assumed | 30.0x |
| Company | Moat | Mgmt | Margin of safety |
|---|---|---|---|
| Micron Technology (MU) | 62 | 70 | 38 |
| Advanced Micro Devices (AMD) | 91 | 75 | 10 |
| Intel Corporation (INTC) | 24 | 39 | 0 |
| NVIDIA Corporation (NVDA) | 100 | 100 | 53 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Broadcom Inc. rather than accepting ours.