Broadcom Inc. (AVGO) Gains But Lags Market: What You Should Know
In the latest trading session, Broadcom Inc. (AVGO) closed at $329.54, marking a +0.35% move from the previous day. This move lagged the S&P 500's daily gain of 0.64%. Elsewhere, the Dow gained 1.39%, while the tech-heavy Nasdaq added 0.52%.
Wall Street will be looking for positivity from AVGO as it approaches its next earnings report date. This is expected to be September 3, 2020. In that report, analysts expect AVGO to post earnings of $5.23 per share. This would mark year-over-year growth of 1.36%. Meanwhile, our latest consensus estimate is calling for revenue of $5.78 billion, up 4.82% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $21.52 per share and revenue of $23.58 billion, which would represent changes of +1.08% and +4.35%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for AVGO. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
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.
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. The Zacks Consensus EPS estimate remained stagnant within the past month. AVGO is holding a Zacks Rank of #2 (Buy) right now.
Investors should also note AVGO's current valuation metrics, including its Forward P/E ratio of 15.26. This represents a discount compared to its industry's average Forward P/E of 22.35.
Meanwhile, AVGO's PEG ratio is currently 1.27. 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 group has a Zacks Industry Rank of 116, putting it in the top 46% 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.
To follow AVGO in the coming trading sessions, be sure to utilize Zacks.com.
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