Broadcom Inc. (AVGO) Dips More Than Broader Markets: What You Should Know
Broadcom Inc. (AVGO) closed at $324.03 in the latest trading session, marking a -1.02% move from the prior day. This change lagged the S&P 500's daily loss of 0.8%. Meanwhile, the Dow lost 0.38%, and the Nasdaq, a tech-heavy index, lost 1.69%.
Heading into today, shares of the chipmaker had gained 5.16% over the past month, outpacing the Computer and Technology sector's gain of 3.6% and lagging the S&P 500's gain of 5.66% in that time.
Wall Street will be looking for positivity from AVGO as it approaches its next earnings report date. This is expected to be September 3, 2020. The company is expected to report EPS of $5.23, up 1.36% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $5.78 billion, up 4.82% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $21.52 per share and revenue of $23.58 billion, which would represent changes of +1.08% and +4.35%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for AVGO. 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.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection remained stagnant. AVGO is holding a Zacks Rank of #2 (Buy) right now.
Looking at its valuation, AVGO is holding a Forward P/E ratio of 15.21. Its industry sports an average Forward P/E of 21.59, so we one might conclude that AVGO is trading at a discount comparatively.
Investors should also note that AVGO has a PEG ratio of 1.26 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 1.72 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 66, putting it in the top 26% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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