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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 $484.68 in the latest trading session, marking a -0.15% move from the prior day. This move lagged the S&P 500's daily loss of 0.09%.

Coming into today, shares of the chipmaker had gained 1.09% in the past month. In that same time, the Computer and Technology sector gained 2.73%, while the S&P 500 gained 2.28%.

AVGO will be looking to display strength as it nears its next earnings release, which is expected to be September 2, 2021. The company is expected to report EPS of $6.88, up 27.41% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.76 billion, up 16.06% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $27.58 per share and revenue of $27.24 billion, which would represent changes of +24.46% and +14.05%, respectively, from the prior year.

Any recent changes to analyst estimates for AVGO should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

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.

Investors should also note AVGO's current valuation metrics, including its Forward P/E ratio of 17.6. This represents a discount compared to its industry's average Forward P/E of 19.47.

Also, we should mention that AVGO has a PEG ratio of 1.17. 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. AVGO's industry had an average PEG ratio of 1.69 as of yesterday's close.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 115, which puts it in the top 46% 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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