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

In the latest trading session, Broadcom Inc. (AVGO) closed at $541.58, marking a +1.57% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.28%. Meanwhile, the Dow gained 0.29%, and the Nasdaq, a tech-heavy index, added 0.19%.

Heading into today, shares of the chipmaker had lost 19.79% over the past month, lagging the Computer and Technology sector's loss of 10.69% and the S&P 500's loss of 5.39% in that time.

Wall Street will be looking for positivity from Broadcom Inc. as it approaches its next earnings report date. In that report, analysts expect Broadcom Inc. to post earnings of $8.15 per share. This would mark year-over-year growth of 23.3%. Meanwhile, our latest consensus estimate is calling for revenue of $7.61 billion, up 14.28% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $33.03 per share and revenue of $30.63 billion. These totals would mark changes of +17.92% and +11.58%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Broadcom Inc.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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 remained stagnant within the past month. Broadcom Inc. is currently a Zacks Rank #1 (Strong Buy).

Valuation is also important, so investors should note that Broadcom Inc. has a Forward P/E ratio of 16.15 right now. This valuation marks a discount compared to its industry's average Forward P/E of 18.69.

Meanwhile, AVGO's PEG ratio is currently 1.11. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Electronics - Semiconductors industry currently had an average PEG ratio of 1.54 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 70, putting it in the top 28% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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