Tesla vs. Broadcom: With Return Forecast Of 42%, Tesla Is A Better Bet

Last Updated: 9/19/2024

We Forecast Higher Stock Return For Tesla vs. Broadcom

Tesla is trading at a cheaper P/S valuation vs. Broadcom and it makes sense to pay less for Tesla for a higher return

TSLA and AVGO have similar market cap

3-Year Return Depends On [1] Revenue Growth [2] P/S

[1] How Much Can Revenue Grow In Next 3 Years

We forecast annual revenue growth of 12.3% for TSLA and 0.0% for AVGO

[2] Which P/S Scenarios Make Sense

We forecast P/S of 7.8 for TSLA and 0.9 for AVGO based on below plausible scenarios

Are Current P/S Ratios Justified

A higher P/S is justified by higher margin, higher revenue growth, better margin expansion, and lower risk

P/S Ratio

Revenue Growth & Operating Margin

Financial & Market Risk

Note On P/S Justification

Past Market Return Comparison vs. Benchmarks

Since 2019, Tesla and Broadcom returned 922% and 667% respectively vs. 120% for S&P 500 and 503% for Trefis Reinforced Value Portfolio

 

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