Broadcom Inc. (AVGO) closed at $294.30 in the latest trading session, marking a +1.42% move from the prior day. This move outpaced the S&P 500's daily gain of 0.02%. Elsewhere, the Dow saw a downswing of 0.14%, while the tech-heavy Nasdaq appreciated by 0.33%.
Coming into today, shares of the chipmaker had gained 7.73% in the past month. In that same time, the Computer and Technology sector gained 6.31%, while the S&P 500 gained 4.93%.
The investment community will be paying close attention to the earnings performance of Broadcom Inc. in its upcoming release. The company's earnings per share (EPS) are projected to be $1.66, reflecting a 33.87% increase from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $15.82 billion, up 21.03% from the year-ago period.
For the full year, the Zacks Consensus Estimates project earnings of $6.64 per share and a revenue of $62.73 billion, demonstrating changes of +36.34% and +21.62%, respectively, from the preceding year.
Investors should also take note of any recent adjustments to analyst estimates for Broadcom Inc. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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 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 0.01% upward. Broadcom Inc. is holding a Zacks Rank of #3 (Hold) right now.
From a valuation perspective, Broadcom Inc. is currently exchanging hands at a Forward P/E ratio of 43.74. This represents a premium compared to its industry average Forward P/E of 26.57.
We can additionally observe that AVGO currently boasts a PEG ratio of 1.7. 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. As the market closed yesterday, the Electronics - Semiconductors industry was having an average PEG ratio of 1.61.
The Electronics - Semiconductors industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 65, placing it within the top 27% of over 250 industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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Broadcom Inc. (AVGO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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