Broadcom Inc. (AVGO) closed the most recent trading day at $310.72, moving -1.74% from the previous trading session. This change lagged the S&P 500's 0.86% loss on the day. Meanwhile, the Dow lost 0.96%, and the Nasdaq, a tech-heavy index, lost 1.13%.
Heading into today, shares of the chipmaker had gained 7.98% over the past month, outpacing the Computer and Technology sector's gain of 4.5% and the S&P 500's gain of 3.66% in that time.
Wall Street will be looking for positivity from AVGO as it approaches its next earnings report date. This is expected to be December 12, 2019. The company is expected to report EPS of $5.37, down 8.21% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.76 billion, up 5.72% from the year-ago period.
Investors should also note any recent changes to analyst estimates for AVGO. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AVGO is holding a Zacks Rank of #3 (Hold) right now.
Looking at its valuation, AVGO is holding a Forward P/E ratio of 13.55. Its industry sports an average Forward P/E of 21.48, so we one might conclude that AVGO is trading at a discount comparatively.
It is also worth noting that AVGO currently has a PEG ratio of 1.15. 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 2.59 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 35, which puts it in the top 14% 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.
To follow AVGO in the coming trading sessions, be sure to utilize Zacks.com.
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