Broadcom Inc. (AVGO) Outpaces Stock Market Gains: What You Should Know
Broadcom Inc. (AVGO) closed the most recent trading day at $312.85, moving +0.79% from the previous trading session. This change outpaced the S&P 500's 0.11% gain on the day. Elsewhere, the Dow gained 0.04%, while the tech-heavy Nasdaq added 0.19%.
Heading into today, shares of the chipmaker had gained 3.79% over the past month, lagging the Computer and Technology sector's gain of 6.07% and the S&P 500's gain of 4.42% in that time.
Wall Street will be looking for positivity from AVGO as it approaches its next earnings report date. In that report, analysts expect AVGO to post earnings of $5.17 per share. This would mark year-over-year growth of 5.94%. Meanwhile, our latest consensus estimate is calling for revenue of $5.66 billion, up 12.95% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $23.13 per share and revenue of $24.42 billion. These totals would mark changes of +11.1% and +17.14%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for AVGO. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AVGO currently has a Zacks Rank of #3 (Hold).
In terms of valuation, AVGO is currently trading at a Forward P/E ratio of 13.42. This valuation marks a discount compared to its industry's average Forward P/E of 19.63.
Investors should also note that AVGO has a PEG ratio of 1.1 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. Electronics - Semiconductors stocks are, on average, holding a PEG ratio of 1.6 based on yesterday's closing prices.
The Electronics - Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 223, putting it in the bottom 13% 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.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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