Broadcom Inc. (AVGO) Gains But Lags Market: What You Should Know
Broadcom Inc. (AVGO) closed at $641.54 in the latest trading session, marking a +1.23% move from the prior day. The stock lagged the S&P 500's daily gain of 1.44%. Elsewhere, the Dow gained 1.26%, while the tech-heavy Nasdaq added 5.21%.
Coming into today, shares of the chipmaker had gained 5.86% in the past month. In that same time, the Computer and Technology sector gained 8.79%, while the S&P 500 gained 2.28%.
Investors will be hoping for strength from Broadcom Inc. as it approaches its next earnings release. On that day, Broadcom Inc. is projected to report earnings of $10.13 per share, which would represent year-over-year growth of 11.69%. Our most recent consensus estimate is calling for quarterly revenue of $8.71 billion, up 7.5% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $41.38 per share and revenue of $35.39 billion. These totals would mark changes of +9.94% and +6.58%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Broadcom Inc.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.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.
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 2.52% higher. Broadcom Inc. is holding a Zacks Rank of #2 (Buy) right now.
Digging into valuation, Broadcom Inc. currently has a Forward P/E ratio of 15.32. This valuation marks a discount compared to its industry's average Forward P/E of 19.67.
It is also worth noting that AVGO currently has a PEG ratio of 1.17. 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 3.35 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 99, which puts it in the top 40% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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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