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Broadcom Inc. (AVGO) Gains As Market Dips: What You Should Know

·3 min read

Broadcom Inc. (AVGO) closed the most recent trading day at $498.69, moving +0.03% from the previous trading session. This change outpaced the S&P 500's 0.08% loss on the day. Elsewhere, the Dow lost 0.15%, while the tech-heavy Nasdaq added 0.03%.

Prior to today's trading, shares of the chipmaker had lost 10.37% over the past month. This has lagged the Computer and Technology sector's loss of 5.66% and the S&P 500's loss of 6.03% in that time.

Broadcom Inc. will be looking to display strength as it nears its next earnings release. On that day, Broadcom Inc. is projected to report earnings of $9.62 per share, which would represent year-over-year growth of 38.22%. Meanwhile, our latest consensus estimate is calling for revenue of $8.41 billion, up 24.01% from the prior-year quarter.

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 recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Within the past 30 days, our consensus EPS projection has moved 0.01% higher. Broadcom Inc. is holding a Zacks Rank of #1 (Strong Buy) right now.

In terms of valuation, Broadcom Inc. is currently trading at a Forward P/E ratio of 13.45. This valuation marks a discount compared to its industry's average Forward P/E of 13.68.

Investors should also note that AVGO has a PEG ratio of 0.93 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. The Electronics - Semiconductors was holding an average PEG ratio of 1.16 at yesterday's closing price.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 43, which puts it in the top 18% 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.

To follow AVGO in the coming trading sessions, be sure to utilize Zacks.com.


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