Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, Broadcom Inc. (AVGO - Free Report) closed at $1,217.77, marking a +1.07% move from the previous day. This change outpaced the S&P 500's 0.76% gain on the day. Meanwhile, the Dow experienced a rise of 0.59%, and the technology-dominated Nasdaq saw an increase of 1.12%.

Shares of the chipmaker have appreciated by 7.94% over the course of the past month, outperforming the Computer and Technology sector's gain of 4.99% and the S&P 500's gain of 2.5%.

The investment community will be closely monitoring the performance of Broadcom Inc. in its forthcoming earnings report. The company is forecasted to report an EPS of $10.61, showcasing a 2.71% upward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $11.27 billion, reflecting a 26.37% rise from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $47.87 per share and revenue of $50.07 billion, indicating changes of +13.3% and +39.8%, respectively, compared to the previous year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Broadcom Inc. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been a 0.42% rise in the Zacks Consensus EPS estimate. Broadcom Inc. presently features a Zacks Rank of #3 (Hold).

Looking at valuation, Broadcom Inc. is presently trading at a Forward P/E ratio of 25.17. This expresses a discount compared to the average Forward P/E of 30.02 of its industry.

It is also worth noting that AVGO currently has a PEG ratio of 1.98. 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. Electronics - Semiconductors stocks are, on average, holding a PEG ratio of 3 based on yesterday's closing prices.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 107, positioning it in the top 43% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Broadcom Inc. (AVGO) - free report >>

Published in