Broadcom Inc. (AVGO) Outpaces Stock Market Gains: What You Should Know
Broadcom Inc. (AVGO) closed at $312.71 in the latest trading session, marking a +0.44% move from the prior day. This change outpaced the S&P 500's 0.29% gain on the day. Meanwhile, the Dow lost 0.24%, and the Nasdaq, a tech-heavy index, added 0.28%.
Coming into today, shares of the chipmaker had lost 2.31% in the past month. In that same time, the Computer and Technology sector gained 4.98%, while the S&P 500 gained 2.96%.
Investors will be hoping for strength from AVGO as it approaches its next earnings release. In that report, analysts expect AVGO to post earnings of $5.23 per share. This would mark year-over-year growth of 1.36%. Our most recent consensus estimate is calling for quarterly revenue of $5.78 billion, up 4.82% from the year-ago period.
AVGO's full-year Zacks Consensus Estimates are calling for earnings of $21.52 per share and revenue of $23.59 billion. These results would represent year-over-year changes of +1.08% and +4.38%, respectively.
Investors should also note any recent changes to analyst estimates for AVGO. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.09% higher. AVGO is holding a Zacks Rank of #3 (Hold) right now.
Digging into valuation, AVGO currently has a Forward P/E ratio of 14.47. Its industry sports an average Forward P/E of 20.83, so we one might conclude that AVGO is trading at a discount comparatively.
Also, we should mention that AVGO has a PEG ratio of 1.2. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Electronics - Semiconductors industry currently had an average PEG ratio of 1.74 as of yesterday's close.
The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 64, which puts it in the top 26% 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.
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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.