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

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Broadcom Inc. (AVGO) closed at $477.65 in the latest trading session, marking a +0.48% move from the prior day. This change outpaced the S&P 500's 0.02% loss on the day.

Coming into today, shares of the chipmaker had lost 0.38% in the past month. In that same time, the Computer and Technology sector gained 2.65%, while the S&P 500 gained 2.91%.

AVGO will be looking to display strength as it nears its next earnings release. On that day, AVGO is projected to report earnings of $6.88 per share, which would represent year-over-year growth of 27.41%. Our most recent consensus estimate is calling for quarterly revenue of $6.76 billion, up 16.06% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $27.58 per share and revenue of $27.24 billion. These totals would mark changes of +24.46% and +14.05%, respectively, from last year.

Any recent changes to analyst estimates for AVGO should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 remained stagnant. AVGO currently has a Zacks Rank of #2 (Buy).

Investors should also note AVGO's current valuation metrics, including its Forward P/E ratio of 17.24. For comparison, its industry has an average Forward P/E of 17.87, which means AVGO is trading at a discount to the group.

Meanwhile, AVGO's PEG ratio is currently 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. The Electronics - Semiconductors industry currently had an average PEG ratio of 1.45 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 104, which puts it in the top 41% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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