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

Broadcom Inc. (AVGO Free Report) closed at $555.12 in the latest trading session, marking a +0.33% move from the prior day. This move outpaced the S&P 500’s daily gain of 0.17%. At the same time, the Dow added 0.55%, and the tech-heavy Nasdaq lost 0.4%.

Coming into today, shares of the chipmaker had gained 5.98% in the past month. In that same time, the Computer and Technology sector gained 4.39%, while the S&P 500 gained 3.19%.

Broadcom Inc. will be looking to display strength as it nears its next earnings release, which is expected to be December 9, 2021. In that report, analysts expect Broadcom Inc. to post earnings of $7.75 per share. This would mark year-over-year growth of 22.05%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.35 billion, up 13.7% from the year-ago period.

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 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. Within the past 30 days, our consensus EPS projection remained stagnant. Broadcom Inc. is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Broadcom Inc. is holding a Forward P/E ratio of 17.84. Its industry sports an average Forward P/E of 25.38, so we one might conclude that Broadcom Inc. is trading at a discount comparatively.

Meanwhile, AVGO’s PEG ratio is currently 1.2. 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. Electronics – Semiconductors stocks are, on average, holding a PEG ratio of 1.54 based on yesterday’s closing prices.

The Electronics – Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 47, which puts it in the top 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

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