Broadcom Inc. (AVGO) Gains But Lags Market: What You Should Know

Broadcom Inc. (AVGO) closed at $486.79 in the latest trading session, marking a +0.44% move from the prior day. The stock lagged the S&P 500's daily gain of 0.82%.

Coming into today, shares of the chipmaker had gained 3.53% in the past month. In that same time, the Computer and Technology sector gained 1.98%, while the S&P 500 gained 0.89%.

Wall Street will be looking for positivity from AVGO as it approaches its next earnings report date. This is expected to be September 2, 2021. On that day, AVGO is projected to report earnings of $6.88 per share, which would represent year-over-year growth of 27.41%. Meanwhile, our latest consensus estimate is calling for revenue of $6.76 billion, up 16.06% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $27.58 per share and revenue of $27.24 billion. These totals would mark changes of +24.46% and +14.05%, respectively, from last year.

Any recent changes to analyst estimates for AVGO should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. AVGO is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that AVGO has a Forward P/E ratio of 17.58 right now. Its industry sports an average Forward P/E of 18.2, so we one might conclude that AVGO is trading at a discount comparatively.

Meanwhile, AVGO's PEG ratio is currently 1.17. 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 1.71 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 103, which puts it in the top 41% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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