Broadcom Inc. (AVGO) Gains As Market Dips: What You Should Know
Broadcom Inc. (AVGO) closed at $320.53 in the latest trading session, marking a +0.64% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.23%. Meanwhile, the Dow lost 0.01%, and the Nasdaq, a tech-heavy index, lost 0.05%.
Prior to today's trading, shares of the chipmaker had gained 6.41% over the past month. This has outpaced the Computer and Technology sector's gain of 4.13% and the S&P 500's gain of 3.16% in that time.
Investors will be hoping for strength from AVGO as it approaches its next earnings release. On that day, AVGO is projected to report earnings of $5.17 per share, which would represent year-over-year growth of 5.94%. Our most recent consensus estimate is calling for quarterly revenue of $5.66 billion, up 12.95% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $23.08 per share and revenue of $24.42 billion. These totals would mark changes of +10.85% and +17.14%, respectively, from last year.
Any recent changes to analyst estimates for AVGO should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AVGO is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that AVGO has a Forward P/E ratio of 13.8 right now. For comparison, its industry has an average Forward P/E of 20.07, which means AVGO is trading at a discount to the group.
We can also see that AVGO currently has a PEG ratio of 1.14. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AVGO's industry had an average PEG ratio of 1.59 as of yesterday's close.
The Electronics - Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 223, putting it in the bottom 13% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.