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

Broadcom Inc. (AVGO) closed at $373.37 in the latest trading session, marking a +0.35% move from the prior day. This change lagged the S&P 500's 0.52% gain on the day. Elsewhere, the Dow gained 0.54%, while the tech-heavy Nasdaq added 0.19%.

Prior to today's trading, shares of the chipmaker had gained 5.82% over the past month. This has lagged the Computer and Technology sector's gain of 7.19% and outpaced the S&P 500's gain of 4.79% in that time.

Wall Street will be looking for positivity from AVGO as it approaches its next earnings report date. In that report, analysts expect AVGO to post earnings of $6.24 per share. This would mark 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.

AVGO's full-year Zacks Consensus Estimates are calling for earnings of $22.05 per share and revenue of $23.86 billion. These results would represent year-over-year changes of +3.57% and +5.57%, respectively.

Investors might also notice recent changes to analyst estimates for AVGO. These revisions help to show the ever-changing nature of near-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. 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.

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 currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, AVGO is currently trading at a Forward P/E ratio of 16.87. Its industry sports an average Forward P/E of 22.93, so we one might conclude that AVGO is trading at a discount comparatively.

Also, we should mention that AVGO has a PEG ratio of 1.34. 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 1.68 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 95, which puts it in the top 38% 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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