Broadcom Inc. (NASDAQ:AVGO)

The financial ratios of the company over the analyzed periods indicate varied trends across valuation metrics such as Price to Earnings (P/E), Price to Operating Profit (P/OP), Price to Sales (P/S), and Price to Book Value (P/BV).

Price to Earnings (P/E) Ratio

The P/E ratio values are not available for the earliest periods but begin at 47.09 and show significant volatility thereafter. Initially, there is a declining trend from a peak of 66.38 down to around 20.7 in early 2023, signaling improving earnings relative to the stock price during that period. Subsequently, the ratio reverses sharply upwards, reaching a high of 175.56 in November 2024 before retreating somewhat to 92.09 by May 2025. This sharp increase toward the end suggests a possible rise in stock price or decrease in earnings, or a combination of both, indicating heightened market valuation or earnings pressure.

Price to Operating Profit (P/OP) Ratio

The P/OP ratio follows a broadly similar trend as the P/E ratio, starting at 36.85 where data begins and falling steadily to lows near 16.17 by late 2022. This represents an improved market valuation relative to operating profits. However, from early 2023 forward, the ratio ascends again, peaking at 76.87 in February 2025 before declining slightly to 58.02 by May 2025. The upward movement in this ratio in recent periods implies either increasing share prices relative to operating profit or declining operating profitability, echoing the trend seen in the P/E ratio.

Price to Sales (P/S) Ratio

The P/S ratio exhibits a generally upward trajectory. Beginning at 5.62, the ratio increases almost consistently over the periods, peaking at 20.85 in May 2025 after reaching intermediate high points such as 18.34 in November 2024. Some fluctuations exist but the overall pattern suggests that the market is valuing the company's sales at progressively higher multiples, which may reflect investor optimism on revenue growth prospects or a premium valuation regime in the market.

Price to Book Value (P/BV) Ratio

Starting from a value near 4.95 in early 2019, the P/BV ratio shows a general increasing trend with a few periods of stability or minor decline. Notably, the metric rises steadily from about 7.4 in late 2020 to exceed 21.59 by November 2024, before experiencing a drop to 13.09 and then bouncing back to 17.09 in the latest period. This suggests increasing market valuation of the company’s net assets, reflecting possibly improved asset quality, increased investor confidence, or accelerated share price appreciation relative to book value. The decline before the recent rise may highlight some market reassessment or changes in book value.

Overall, the data illustrate a period of valuation expansion followed by considerable volatility. The initial downward trends in P/E and P/OP ratios point to improving earnings and operating profit metrics relative to the stock price through early 2023. After this, a marked increase in valuation multiples across all examined ratios suggests elevated market expectations or reduced profitability that investors are pricing in, resulting in high premium multiples on earnings, profits, sales, and assets.

Share Price Trend

The share price exhibited significant volatility over the examined period. Initially fluctuating between approximately $23 and $43 in early 2019 and 2020, the share price showed a generally upward trajectory beginning in 2021. Notable increases occurred throughout 2023 and into 2024, peaking at $252.91 in November 2024 before experiencing slight declines near the end of the data set. Overall, the share price more than tripled from the early figures to the latest reported values, indicating strong market appreciation.

Earnings Per Share (EPS) Trend

EPS data begins in early 2020, revealing a generally consistent growth pattern from $0.68 in February 2020 to a peak of approximately $3.36 in October 2023. Following this peak, the EPS declined markedly to $1.09 by February 2024, though it showed recovery thereafter, reaching $2.75 by May 2025. This indicates a period of strong earnings growth followed by a sharp but temporary downturn and subsequent recovery.

Price-to-Earnings (P/E) Ratio Trend

The P/E ratio demonstrated considerable variability throughout the period. Early ratios in 2020 were relatively elevated, ranging from around 37 to 66, reflecting possibly optimistic market valuations despite modest EPS. A downward trend in the P/E ratio was observed during 2021 and 2022, reaching lower values near 20 to 25, coinciding with steady EPS growth. However, in 2023 and 2024, the P/E ratio escalated sharply, reaching extremely high levels above 100 and even 175, despite the temporary EPS drop during this period. This suggests that market expectations remained high or that the share price increased disproportionately relative to earnings.

Summary of Financial Insights

The financial data suggests that the company experienced robust earnings growth over several years until late 2023, which largely supported the rising share price. The sharp fall in EPS around early 2024, followed by a quick recovery, contrasts with the share price that peaked and then remained elevated, causing spikes in the P/E ratio to levels that may suggest market overvaluation or expectations of future growth. The trends imply that while earnings have generally trended upward, market sentiment and valuation multiples have fluctuated widely, particularly during periods of earnings volatility.

The financial data reveals several notable trends in share price, operating profit per share, and the price-to-operating profit ratio over the analyzed periods.

Share Price

The share price exhibited considerable volatility with a general upward trajectory. Beginning at US$29.03 in early 2019, the price fluctuated below and above the US$30 mark during most of 2019 and early 2020. From mid-2020 onwards, a strong upward trend is observed, with the share price increasing sharply from approximately US$43.46 in late 2020 to a peak of US$252.91 by mid-2025. Despite occasional dips, such as around early 2022 and early 2024, the overall movement is substantially positive, indicating growing market valuation through the period.

Operating Profit per Share (OPPS)

Operating profit per share data, available from early 2020, shows a progressive and sustained increase. Starting at US$0.87, OPPS rose steadily each quarter, reaching US$4.36 by mid-2025. The growth is relatively smooth, with only minor decelerations observed around the quarters ending in late 2023 and early 2024. This trend suggests improving operational efficiency or profitability on a per-share basis over the period.

Price-to-Operating Profit Ratio (P/OP)

The P/OP ratio demonstrates significant fluctuations with a general pattern of initial decline followed by substantial volatility and a rising trend towards the end of the period. Initially recorded at 36.85 in early 2020, the ratio decreased steadily to a low point near 16.17 in mid-2022, indicating that the share price was becoming more aligned with operating profit growth. Subsequent quarters experienced upward spikes, peaking around 76.87 in late 2024, before moderating somewhat to around 58.02 by mid-2025. The rising ratio in the later periods suggests that share price growth outpaced operating profit gains temporarily, potentially reflecting heightened market expectations or speculative factors.

Overall, the data depicts a company undergoing strong growth in operating profitability accompanied by a generally positive but more volatile share price performance. The fluctuations in the P/OP ratio underscore varying market sentiment and valuation dynamics, particularly in the latter stages of the timeline.

The data reveals significant trends in share price, sales per share, and the price-to-sales (P/S) ratio over multiple quarterly periods.

Share Price

The share price exhibits a general upward trajectory from early 2019 through mid-2025. Initial fluctuations are evident, with values oscillating around the $25 to $35 range until late 2019. Beginning in 2020, the price starts to show more consistent increases, reaching above $60 by early 2022. The trend strengthens considerably from 2022 onward, with the share price surpassing $100 by early 2024 and peaking near $253 by the middle of 2025. Occasional pullbacks occur but are followed by a robust recovery, indicating heightened investor confidence and increasing market valuation over the period.

Sales per Share

Sales per share data, available from early 2020, shows a steady and moderate increase across the observed quarters. Starting at approximately $5.68, sales per share advance gradually to over $12 by mid-2025. The progression reflects firm growth in revenue generated on a per-share basis, suggesting expanding operational performance and possibly greater market penetration or efficiency within the company’s business segments.

Price-to-Sales (P/S) Ratio

The P/S ratio exhibits notable variability, underscoring changing market sentiment relative to sales. Initially, the ratio fluctuates between 4.13 and 7.66 in 2020 and 2021, indicating moderate valuation levels relative to sales. From 2022 onward, the P/S ratio escalates sharply, peaking at over 20 at several intervals in late 2024 through mid-2025. This increase suggests investors are attributing a higher premium to each dollar of sales, potentially reflecting expectations of accelerated revenue growth, improved profit margins, or strategic positioning that enhances future prospects. It also indicates the stock may be trading at higher multiples, reflecting bullish sentiment.

Overall, the data portrays a company undergoing significant market valuation expansion accompanied by consistent sales growth. While the sales per share growth appears steady and incremental, the share price and P/S ratio increases occur at a sharper pace, implying strong investor optimism. The rising P/S ratio signals that market participants may be anticipating enhanced profitability or strategic advantages, justifying higher valuation multiples. This pattern is characteristic of a growth-stage entity attracting premium pricing, potentially due to innovation, market share gains, or favorable industry dynamics.

The analysis of the quarterly financial data reveals distinct trends in the share price, book value per share (BVPS), and price-to-book value (P/BV) ratio over the observed periods.

Share Price (US$)

The share price demonstrates considerable volatility with an overall upward trajectory. Initially, it fluctuated within a range of approximately $23 to $31 between early 2019 and early 2020. This was followed by a steady and notable increase through 2020 and 2021, reaching over $63 by early 2022. After a brief decline through the middle of 2022, the share price resumed an upward trend, accelerating significantly from early 2023 onward, peaking above $252 in mid-2024 before a slight decline towards the end of 2024 and into early 2025, where it remains high at approximately $194 to $252. This pattern suggests strong market performance and growing investor confidence over the long term, despite periods of temporary pullbacks.

Book Value Per Share (BVPS) (US$)

BVPS shows relative stability with minor fluctuations throughout the period. Initially, it was around $5.87 in early 2019, with slight decreases and recoveries ranging roughly between $5.15 and $6.27 through early 2023. A dramatic increase occurs starting at the beginning of 2024, doubling the BVPS to a level above $14 by mid-2024 and maintaining this higher valuation through subsequent quarters. This significant increase in BVPS in 2024 may reflect substantial improvements in net asset value or equity, suggesting a strengthening financial foundation or possibly accounting adjustments during this period.

Price-to-Book Value (P/BV) Ratio

The P/BV ratio varied widely, reflecting the interaction of share price movements and BVPS changes. It started at moderate levels around 4.95 in early 2019, exhibiting fluctuations between 3.84 and 8.35 during 2019 to 2021. From early 2021 through early 2023, the P/BV ratio escalated sharply, reaching notable highs above 21 by late 2023, driven largely by the accelerated increase in share price relative to the relatively stable BVPS in that timeframe.

Following the spike, the P/BV ratio notably declined to lower levels ranging from about 8.32 to 17.09 in 2024 and early 2025, coinciding with the surge in BVPS. This reversal suggests that the rapid growth in book value began to temper the overvaluation indicated by prior P/BV peaks, potentially signifying a return toward more balanced valuation metrics in recent quarters.