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Broadcom Inc. (AVGO) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
Weyerhaeuser (WY) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

In the latest trading session, Broadcom Inc. (AVGO) closed at $241.79, marking a +0.84% move from the previous day. This move outpaced the S&P 500's daily gain of 0.13%. Meanwhile, the Dow gained 0.61%, and the Nasdaq, a tech-heavy index, lost 0.08%.

Coming into today, shares of the chipmaker had gained 13.88% in the past month. In that same time, the Computer and Technology sector gained 1.4%, while the S&P 500 gained 2.1%.

Wall Street will be looking for positivity from AVGO as it approaches its next earnings report date. This is expected to be December 5, 2018. The company is expected to report EPS of $5.60, up 22% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.41 billion, up 11.62% from the prior-year quarter.

AVGO's full-year Zacks Consensus Estimates are calling for earnings of $20.56 per share and revenue of $20.82 billion. These results would represent year-over-year changes of +28.34% and +18.04%, respectively.

Any recent changes to analyst estimates for AVGO should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 3.28% higher within the past month. AVGO is currently a Zacks Rank #2 (Buy).

Investors should also note AVGO's current valuation metrics, including its Forward P/E ratio of 11.66. This valuation marks a discount compared to its industry's average Forward P/E of 18.31.

It is also worth noting that AVGO currently has a PEG ratio of 0.88. 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. Electronics - Semiconductors stocks are, on average, holding a PEG ratio of 1.74 based on yesterday's closing prices.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 90, which puts it in the top 35% 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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