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

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In the latest trading session, Broadcom Inc. (AVGO - Free Report) closed at $622.64, marking a -1.01% move from the previous day. This change lagged the S&P 500's 0.36% gain on the day. At the same time, the Dow added 0.01%, and the tech-heavy Nasdaq gained 1.91%.

Coming into today, shares of the chipmaker had lost 0.51% in the past month. In that same time, the Computer and Technology sector gained 5.72%, while the S&P 500 gained 1.24%.

Investors will be hoping for strength from Broadcom Inc. as it approaches its next earnings release. In that report, analysts expect Broadcom Inc. to post earnings of $10.13 per share. This would mark year-over-year growth of 11.69%. Our most recent consensus estimate is calling for quarterly revenue of $8.71 billion, up 7.5% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $41.38 per share and revenue of $35.39 billion. These totals would mark changes of +9.94% and +6.58%, respectively, from last year.

Any recent changes to analyst estimates for Broadcom Inc. should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 0.43% higher within the past month. Broadcom Inc. currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Broadcom Inc. is currently trading at a Forward P/E ratio of 15.2. This represents a discount compared to its industry's average Forward P/E of 19.17.

It is also worth noting that AVGO currently has a PEG ratio of 1.16. 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. AVGO's industry had an average PEG ratio of 3.24 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 101, which puts it in the top 41% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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