Yahoo Finance Broadcom Inc. (AVGO) Gains But Lags Market: What You Should Know
In the latest trading session, Broadcom Inc. (AVGO) closed at $392.23, marking a +1.35% move from the previous day. This change lagged the S&P 500's 1.62% gain on the day. Meanwhile, the Dow gained 1.54%, and the Nasdaq, a tech-heavy index, added 1.31%.
Coming into today, shares of the chipmaker had gained 6.6% in the past month. In that same time, the Computer and Technology sector gained 2.55%, while the S&P 500 gained 3.4%.
Wall Street will be looking for positivity from AVGO as it approaches its next earnings report date. This is expected to be December 10, 2020. The company is expected to report EPS of $6.24, up 15.77% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $6.42 billion, up 11.11% from the year-ago period.
It is also important to note the recent changes to analyst estimates for AVGO. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AVGO is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, AVGO is currently trading at a Forward P/E ratio of 15.3. For comparison, its industry has an average Forward P/E of 27.24, which means AVGO is trading at a discount to the group.
It is also worth noting that AVGO currently has a PEG ratio of 1.21. 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 industry currently had an average PEG ratio of 1.58 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 97, putting it in the top 39% 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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