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Broadcom Inc. (AVGO) Dips More Than Broader Markets: What You Should Know

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Broadcom Inc. (AVGO - Free Report) closed the most recent trading day at $444.54, moving -1.24% from the previous trading session. This change lagged the S&P 500's 0.67% loss on the day.

AVGO will be looking to display strength as it nears its next earnings release, which is expected to be June 3, 2021. In that report, analysts expect AVGO to post earnings of $6.44 per share. This would mark year-over-year growth of 25.29%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.51 billion, up 13.31% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $26.91 per share and revenue of $26.95 billion, which would represent changes of +21.44% and +12.81%, respectively, from the prior year.

Any recent changes to analyst estimates for AVGO should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AVGO is currently a Zacks Rank #3 (Hold).

Digging into valuation, AVGO currently has a Forward P/E ratio of 16.73. This represents a discount compared to its industry's average Forward P/E of 20.78.

Also, we should mention that AVGO has a PEG ratio of 0.76. 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 1.79 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 86, which puts it in the top 34% 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.

To follow AVGO in the coming trading sessions, be sure to utilize Zacks.com.


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