Broadcom Inc. (AVGO) Outpaces Stock Market Gains: What You Should Know
Broadcom Inc. (AVGO) closed at $315.69 in the latest trading session, marking a +1.59% move from the prior day. This change outpaced the S&P 500's 0.47% gain on the day. At the same time, the Dow added 0.4%, and the tech-heavy Nasdaq gained 0.87%.
Coming into today, shares of the chipmaker had gained 0.87% in the past month. In that same time, the Computer and Technology sector gained 2.81%, while the S&P 500 gained 1.43%.
AVGO will be looking to display strength as it nears its next earnings release, which is expected to be March 12, 2020. On that day, AVGO is projected to report earnings of $5.22 per share, which would represent a year-over-year decline of 5.95%. Meanwhile, our latest consensus estimate is calling for revenue of $5.93 billion, up 2.36% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $23.16 per share and revenue of $25.02 billion, which would represent changes of +8.78% and +10.72%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for AVGO. These recent revisions tend to reflect the evolving nature of short-term business trends. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.43% higher. AVGO is currently a Zacks Rank #2 (Buy).
Looking at its valuation, AVGO is holding a Forward P/E ratio of 13.42. This represents a discount compared to its industry's average Forward P/E of 22.12.
We can also see that AVGO currently has a PEG ratio of 1.23. 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 2.06 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 22, which puts it in the top 9% 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.
To follow AVGO in the coming trading sessions, be sure to utilize Zacks.com.
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