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Broadcom Inc. (AVGO) Laps the Stock Market: Here's Why
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Broadcom Inc. (AVGO - Free Report) ended the recent trading session at $1,107.68, demonstrating a +0.7% swing from the preceding day's closing price. This move outpaced the S&P 500's daily gain of 0.08%. Elsewhere, the Dow lost 0.31%, while the tech-heavy Nasdaq added 0.02%.
The chipmaker's stock has dropped by 0.59% in the past month, falling short of the Computer and Technology sector's gain of 2.68% and the S&P 500's gain of 3.52%.
Market participants will be closely following the financial results of Broadcom Inc. in its upcoming release. It is anticipated that the company will report an EPS of $10.61, marking a 2.71% rise compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $11.27 billion, up 26.37% from the prior-year quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $47.87 per share and revenue of $50.07 billion, which would represent changes of +13.3% and +39.8%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Broadcom Inc. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 2.3% upward. Broadcom Inc. currently has a Zacks Rank of #3 (Hold).
Looking at its valuation, Broadcom Inc. is holding a Forward P/E ratio of 22.98. This expresses a discount compared to the average Forward P/E of 28.15 of its industry.
One should further note that AVGO currently holds a PEG ratio of 1.81. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Electronics - Semiconductors industry held an average PEG ratio of 2.98.
The Electronics - Semiconductors industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 154, this industry ranks in the bottom 39% of all industries, numbering over 250.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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Broadcom Inc. (AVGO) Laps the Stock Market: Here's Why
Broadcom Inc. (AVGO - Free Report) ended the recent trading session at $1,107.68, demonstrating a +0.7% swing from the preceding day's closing price. This move outpaced the S&P 500's daily gain of 0.08%. Elsewhere, the Dow lost 0.31%, while the tech-heavy Nasdaq added 0.02%.
The chipmaker's stock has dropped by 0.59% in the past month, falling short of the Computer and Technology sector's gain of 2.68% and the S&P 500's gain of 3.52%.
Market participants will be closely following the financial results of Broadcom Inc. in its upcoming release. It is anticipated that the company will report an EPS of $10.61, marking a 2.71% rise compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $11.27 billion, up 26.37% from the prior-year quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $47.87 per share and revenue of $50.07 billion, which would represent changes of +13.3% and +39.8%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Broadcom Inc. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 2.3% upward. Broadcom Inc. currently has a Zacks Rank of #3 (Hold).
Looking at its valuation, Broadcom Inc. is holding a Forward P/E ratio of 22.98. This expresses a discount compared to the average Forward P/E of 28.15 of its industry.
One should further note that AVGO currently holds a PEG ratio of 1.81. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Electronics - Semiconductors industry held an average PEG ratio of 2.98.
The Electronics - Semiconductors industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 154, this industry ranks in the bottom 39% of all industries, numbering over 250.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.