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

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Zacks Equity Research
·3 min read
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Broadcom Inc. (AVGO) closed the most recent trading day at $470.63, moving +1.17% from the previous trading session. This move outpaced the S&P 500's daily gain of 1.09%. Elsewhere, the Dow gained 1.08%, while the tech-heavy Nasdaq added 1.23%.

AVGO will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $6.55, up 24.76% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $6.61 billion, up 12.81% from the year-ago period.

AVGO's full-year Zacks Consensus Estimates are calling for earnings of $26.28 per share and revenue of $26.36 billion. These results would represent year-over-year changes of +18.59% and +10.36%, respectively.

Investors might also notice 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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.29% higher. AVGO is currently sporting a Zacks Rank of #2 (Buy).

Looking at its valuation, AVGO is holding a Forward P/E ratio of 17.7. This valuation marks a discount compared to its industry's average Forward P/E of 22.02.

We can also see that AVGO currently has a PEG ratio of 1.38. 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 was holding an average PEG ratio of 1.51 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 104, which puts it in the top 41% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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