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Broadcom Inc. (AVGO) Dips More Than Broader Markets: What You Should Know

Broadcom Inc. (AVGO) closed the most recent trading day at $349.63, moving -1.52% from the previous trading session. This change lagged the S&P 500's daily loss of 1.21%. At the same time, the Dow lost 0.59%, and the tech-heavy Nasdaq lost 2.45%.

Heading into today, shares of the chipmaker had lost 3.69% over the past month, lagging the Computer and Technology sector's gain of 0.77% and the S&P 500's loss of 0.71% in that time.

Investors will be hoping for strength from AVGO as it approaches its next earnings release. On that day, AVGO is projected to report earnings of $6.24 per share, which would represent year-over-year growth of 15.77%. Meanwhile, our latest consensus estimate is calling for revenue of $6.42 billion, up 11.11% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $22.05 per share and revenue of $23.86 billion. These totals would mark changes of +3.57% and +5.57%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for AVGO. 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. AVGO is currently a Zacks Rank #3 (Hold).

Digging into valuation, AVGO currently has a Forward P/E ratio of 16.1. Its industry sports an average Forward P/E of 22.7, so we one might conclude that AVGO is trading at a discount comparatively.

Also, we should mention that AVGO has a PEG ratio of 1.28. 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 1.62 based on yesterday's closing prices.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 89, putting it in the top 36% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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