In the latest trading session, Broadcom Inc. (AVGO) closed at $161.38, moving +1.1% from the previous day’s close. The stock’s move was more pronounced than the S&P 500’s daily gain of 0.16%. The Dow, on the other hand, posted a gain of 0.02% and the tech-heavy Nasdaq gained 0.16%.

The chipmaker’s shares rose 6.26% over the past month, outperforming the Computer and Technology sector’s gain of 2.69% and the S&P 500’s gain of 2.97%.

The investment community will be closely watching Broadcom Inc.’s performance in its upcoming earnings report. The company is scheduled to release its results on September 5, 2024. The company is expected to report earnings per share of $1.20, representing an increase of 14.29% from the corresponding quarter of the previous year. Meanwhile, our current consensus estimate is projecting revenue of $12.9 billion, representing growth of 45.36% from the corresponding quarter of the previous year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $4.72 per share and revenue of $51.37 billion, representing changes of +11.58% and +43.43%, respectively, from the prior year.

Investors should also pay attention to recent changes in analyst estimates for Broadcom Inc. Such recent changes usually indicate a changing landscape in near-term business trends. Positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Empirical research shows that these estimate changes are directly related to upcoming stock price movements. To capitalize on this, we have developed the Zacks Rank, a unique model that takes these estimate changes into account and provides a practical rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record, with #1 stocks delivering an average annual return of +25% since 1988. Over the past 30 days, the Zacks Consensus Estimate for Earnings per Share remained unchanged. Currently, Broadcom Inc. has a Zacks Rank of #3 (Hold).

In terms of valuation, Broadcom Inc. currently has a P/E ratio of 33.8. This represents a premium to the industry’s P/E ratio of 32.6.

Investors should also note that AVGO currently has a PEG ratio of 2.23. The PEG ratio is similar to the widely used P/E ratio, but also takes into account the company’s expected earnings growth rate. The Electronics – Semiconductors industry had an average PEG ratio of 2.38 as of yesterday’s close.

The story continues

The Electronics – Semiconductors industry is part of the Computer & Technology sector. Currently, this industry has a Zacks Industry Rank of 139, putting it in the bottom 46% of over 250 industries.

The Zacks Industry Rank evaluates the vitality of our specific industry groups by calculating the average Zacks Rank of the individual stocks included in the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

Remember to use Zacks.com to track these and other metrics on stock movement during the coming trading sessions.

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