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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 at $439.94 in the latest trading session, marking a -0.38% move from the prior day. This change lagged the S&P 500's daily loss of 0.25%.

Coming into today, shares of the chipmaker had lost 8% in the past month. In that same time, the Computer and Technology sector lost 3.03%, while the S&P 500 gained 1.26%.

Wall Street will be looking for positivity from AVGO as it approaches its next earnings report date. This is expected to be June 3, 2021. The company is expected to report EPS of $6.44, up 25.29% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.51 billion, up 13.31% from the prior-year quarter.

AVGO's full-year Zacks Consensus Estimates are calling for earnings of $26.91 per share and revenue of $26.95 billion. These results would represent year-over-year changes of +21.44% and +12.81%, respectively.

It is also important to note the recent changes to analyst estimates for AVGO. These recent revisions tend to reflect the evolving nature of short-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. 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.

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. Within the past 30 days, our consensus EPS projection remained stagnant. AVGO is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that AVGO has a Forward P/E ratio of 16.41 right now. Its industry sports an average Forward P/E of 17.84, so we one might conclude that AVGO is trading at a discount comparatively.

Investors should also note that AVGO has a PEG ratio of 0.74 right now. 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 industry currently had an average PEG ratio of 1.57 as of yesterday's close.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 87, putting 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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