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Broadcom Inc. (AVGO) Dips More Than Broader Markets: What You Should Know

·3 min read

Broadcom Inc. (AVGO) closed the most recent trading day at $545.53, moving -1.07% from the previous trading session. This change lagged the S&P 500's 0.12% loss on the day. Meanwhile, the Dow gained 0.09%, and the Nasdaq, a tech-heavy index, added 0.4%.

Coming into today, shares of the chipmaker had gained 10.58% in the past month. In that same time, the Computer and Technology sector gained 10.34%, while the S&P 500 gained 8.25%.

Investors will be hoping for strength from Broadcom Inc. as it approaches its next earnings release, which is expected to be September 1, 2022. In that report, analysts expect Broadcom Inc. to post earnings of $9.62 per share. This would mark year-over-year growth of 38.22%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.41 billion, up 24.01% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $37.06 per share and revenue of $32.98 billion. These totals would mark changes of +32.31% and +20.14%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Broadcom Inc.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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 remained stagnant. Broadcom Inc. is currently a Zacks Rank #4 (Sell).

Investors should also note Broadcom Inc.'s current valuation metrics, including its Forward P/E ratio of 14.88. Its industry sports an average Forward P/E of 15.95, so we one might conclude that Broadcom Inc. is trading at a discount comparatively.

Investors should also note that AVGO has a PEG ratio of 1.02 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. AVGO's industry had an average PEG ratio of 1.09 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 136, putting it in the bottom 47% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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