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Broadcom Inc. (AVGO) Gains But Lags Market: What You Should Know

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Broadcom Inc. (AVGO - Free Report) closed the most recent trading day at $459.79, moving +0.55% from the previous trading session. This move lagged the S&P 500's daily gain of 0.93%.

Prior to today's trading, shares of the chipmaker had lost 2.79% over the past month. This has lagged the Computer and Technology sector's gain of 8.56% and the S&P 500's gain of 5.84% in that time.

Investors will be hoping for strength from AVGO as it approaches its next earnings release. On that day, AVGO is projected to report earnings of $6.44 per share, which would represent year-over-year growth of 25.29%. Meanwhile, our latest consensus estimate is calling for revenue of $6.51 billion, up 13.31% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $26.91 per share and revenue of $26.95 billion. These totals would mark changes of +21.44% and +12.81%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for AVGO. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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 is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, AVGO currently has a Forward P/E ratio of 17.17. This valuation marks a discount compared to its industry's average Forward P/E of 20.53.

It is also worth noting that AVGO currently has a PEG ratio of 0.78. 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. The Electronics - Semiconductors was holding an average PEG ratio of 1.99 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 107, which puts it in the top 43% 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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