In the latest close session, Broadcom Inc. (AVGO) was up +2.1% at $352.23. This change outpaced the S&P 500's 0.16% gain on the day. Elsewhere, the Dow saw an upswing of 0.17%, while the tech-heavy Nasdaq appreciated by 0.26%.
The stock of chipmaker has fallen by 4.16% in the past month, lagging the Computer and Technology sector's loss of 0.85% and the S&P 500's gain of 1.89%.
The upcoming earnings release of Broadcom Inc. will be of great interest to investors. The company's earnings per share (EPS) are projected to be $2.02, reflecting a 26.25% increase from the same quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $19.22 billion, indicating a 28.86% growth compared to the corresponding quarter of the prior year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $9.86 per share and a revenue of $93.48 billion, representing changes of +44.57% and +46.33%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for Broadcom Inc. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 7.73% higher within the past month. Currently, Broadcom Inc. is carrying a Zacks Rank of #3 (Hold).
With respect to valuation, Broadcom Inc. is currently being traded at a Forward P/E ratio of 34.99. This denotes no noticeable deviation relative to the industry average Forward P/E of 34.99.
It is also worth noting that AVGO currently has a PEG ratio of 0.98. 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. The Electronics - Semiconductors industry currently had an average PEG ratio of 1.96 as of yesterday's close.
The Electronics - Semiconductors industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 101, this industry ranks in the top 42% of all industries, numbering over 250.
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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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
