Broadcom Inc. (NASDAQ:AVGO)

Net Income

The net income showed a general upward trend from 2019 to 2023, increasing from $2,724 million to a peak of $14,082 million. However, in 2024, there was a significant decline to $5,895 million, indicating a substantial reduction in profitability during the most recent period.

Earnings Before Tax (EBT)

EBT mirrored the net income pattern, rising steadily from $2,226 million in 2019 to a high of $15,097 million in 2023. In 2024, EBT decreased considerably to $9,916 million, which, although lower than the peak, remained higher than the earlier years, suggesting some resilience despite the recent decline.

Earnings Before Interest and Tax (EBIT)

EBIT followed a consistent growth trajectory from $3,670 million in 2019 to $16,719 million in 2023. A decline to $13,869 million was observed in 2024, indicating reduced operating profitability but still maintaining a substantially higher level compared to the initial years.

Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)

EBITDA demonstrated steady growth throughout the observed periods, starting at $9,478 million in 2019 and increasing consistently to $20,554 million in 2023. Unlike the other earnings metrics, EBITDA further increased in 2024 to $23,879 million, suggesting improvements in operating cash flow and core earnings capability despite declines in net income and EBIT.

Summary

The financial data reveals a pattern of strong growth in earnings metrics from 2019 through 2023, followed by a notable contraction in net income, EBT, and EBIT in 2024. This decline may reflect increased expenses, lower revenues, or other operational challenges not yet offset by non-cash adjustments. The continuous rise in EBITDA in 2024 emphasizes that cash-generating ability and core operational performance remained robust, potentially signaling that non-operating factors or higher costs impacted the bottom line and tax implications more heavily in the latest period.

The financial data reveals several key trends related to enterprise value (EV), earnings before interest, tax, depreciation and amortization (EBITDA), and the EV to EBITDA ratio over the observed periods.

Enterprise Value (EV)

The enterprise value shows a strong upward trend over the six years. Starting at approximately 154.6 billion US dollars in 2019, it escalated to over 1.09 trillion US dollars by 2024. Notably, while EV increased steadily from 2019 to 2021, there was a slight decline in 2022 before it surged dramatically in 2023 and 2024, indicating possible major investments, acquisitions, or market revaluations driving the company's valuation higher.

Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)

EBITDA also showed consistent growth across the period, rising from approximately 9.5 billion US dollars in 2019 to nearly 23.9 billion US dollars in 2024. The rate of increase appears relatively steady, with a more pronounced jump observed between 2020 and 2022. This steady growth suggests improving operational performance or increased profitability without significant disruptions.

EV/EBITDA Ratio

The EV/EBITDA ratio reveals considerable fluctuations that reflect changes in market valuation relative to earnings. The ratio rose gradually from 16.32 in 2019 to a peak of 19.72 in 2021, followed by a notable decline to 13.54 in 2022, suggesting a period where earnings grew faster than valuation. However, from 2022 onwards, the ratio surged sharply, reaching a high of 45.78 in 2024. This significant increase implies that enterprise value grew disproportionately faster than EBITDA, possibly indicating elevated market expectations, higher perceived growth prospects, or speculative market conditions.