Is AVGO a high-quality business?

AlphaMadera's AlphaQuality grade scores Broadcom Inc. on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how AVGO compares to a Buffett-style quality bar.

What is Broadcom Inc.'s AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to AVGO based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes AVGO a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

AVGO - Broadcom Inc.

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $498.19 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Platform & Compounding FCF

AlphaQuality — archetype-weighted quantitative grade

B+ 78.7 / 100 composite

Composite Grade

Composite of six pillars weighted for platform & compounding fcf businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 25%

B- 62.3

5yr Avg ROIC 10.8% 64/100
Operating Margin Trend +0.10 pp/yr 58/100

Capital Efficiency

Weight: 15%

C+ 58.7

5yr Avg ROE 15.1% 80/100
5yr Share-Count CAGR 3.1% 19/100

Growth Quality

Weight: 25%

A+ 100.0

5yr Revenue CAGR 23.5% 100/100
5yr EPS CAGR 33.5% 100/100
Revenue-Growth Years (5) 5/5 100/100

Cash Generation

Weight: 20%

A 92.7

5yr FCF Margin 45.3% 100/100
5yr FCF/NI Conversion 1.82x 84/100

Balance Sheet

Weight: 10%

A- 83.7

Net Debt / EBITDA 1.41x 79/100
Interest Coverage (EBIT/Int) 8.08x 77/100
Altman Z-Score 12.68 100/100

Stability

Weight: 5%

C- 48.6

EPS Volatility (σ/μ) 0.80 8/100
Piotroski F-Score 6 67/100
Negative-Revenue Years (5) 0/5 100/100

8 of 8 gurus held; 2 new buys; 5 added; 1 trimmed; 1 full exit.

Holders: 8 +1
Avg Δ position: +42.9%
New buys: 2
Full exits: 1

Loeb new
Mandel sold -100%
Druckenmiller new

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (25%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (25%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (20%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (10%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (5%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.