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

·3-min read

In the latest trading session, Broadcom Inc. (AVGO) closed at $543.19, marking a -0.55% move from the previous day. This change lagged the S&P 500's daily gain of 0.02%. Elsewhere, the Dow gained 0.03%, while the tech-heavy Nasdaq lost 0.16%.

Prior to today's trading, shares of the chipmaker had lost 7.85% over the past month. This has was narrower than the Computer and Technology sector's loss of 14.21% and the S&P 500's loss of 12.5% in that time.

Investors will be hoping for strength from Broadcom Inc. as it approaches its next earnings release, which is expected to be June 2, 2022. The company is expected to report EPS of $8.72, up 31.72% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.91 billion, up 19.62% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $35.40 per share and revenue of $31.96 billion, which would represent changes of +26.38% and +16.43%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Broadcom Inc.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. 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, 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. Within the past 30 days, our consensus EPS projection remained stagnant. Broadcom Inc. currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Broadcom Inc. is currently trading at a Forward P/E ratio of 15.43. This valuation marks a discount compared to its industry's average Forward P/E of 15.52.

Meanwhile, AVGO's PEG ratio is currently 0.99. 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. The Electronics - Semiconductors was holding an average PEG ratio of 1.77 at yesterday's closing price.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 94, which puts it in the top 38% 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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