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Broadcom Inc. (AVGO) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research
Updated

Broadcom Inc. (AVGO) closed the most recent trading day at $311.07, moving -0.59% from the previous trading session. This change lagged the S&P 500's 0.05% gain on the day. Elsewhere, the Dow gained 0.11%, while the tech-heavy Nasdaq added 0.11%.

Heading into today, shares of the chipmaker had gained 8.11% over the past month, outpacing the Computer and Technology sector's gain of 4.89% and the S&P 500's gain of 4.32% in that time.

AVGO will be looking to display strength as it nears its next earnings release, which is expected to be December 12, 2019. The company is expected to report EPS of $5.37, down 8.21% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.76 billion, up 5.72% from the year-ago period.

Any recent changes to analyst estimates for AVGO should also be noted by investors. 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.

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Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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

Looking at its valuation, AVGO is holding a Forward P/E ratio of 13.43. This valuation marks a discount compared to its industry's average Forward P/E of 22.18.

It is also worth noting that AVGO currently has a PEG ratio of 1.14. 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. AVGO's industry had an average PEG ratio of 2.5 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 40, putting it in the top 16% 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.

Click to get this free report Broadcom Inc. (AVGO) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research