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What's Next: Broadcom's Earnings Preview
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What's Next: Broadcom's Earnings Preview
Dec 11, 2024 6:42 AM

Broadcom ( AVGO ) is set to give its latest quarterly earnings report on Thursday, 2024-12-12. Here's what investors need to know before the announcement.

Analysts estimate that Broadcom ( AVGO ) will report an earnings per share (EPS) of $1.39.

Broadcom ( AVGO ) bulls will hope to hear the company announce they've not only beaten that estimate, but also to provide positive guidance, or forecasted growth, for the next quarter.

New investors should note that it is sometimes not an earnings beat or miss that most affects the price of a stock, but the guidance (or forecast).

Earnings History Snapshot

During the last quarter, the company reported an EPS beat by $0.04, leading to a 10.36% drop in the share price on the subsequent day.

Here's a look at Broadcom's ( AVGO ) past performance and the resulting price change:

Quarter Q3 2024 Q2 2024 Q1 2024 Q4 2023
EPS Estimate 1.20 1.08 1.03 1.10
EPS Actual 1.24 1.10 1.10 1.11
Price Change % -10.0% 12.0% -7.000000000000001% 2.0%

Performance of Broadcom Shares

Shares of Broadcom ( AVGO ) were trading at $171.81 as of December 10. Over the last 52-week period, shares are up 55.27%. Given that these returns are generally positive, long-term shareholders should be satisfied going into this earnings release.

Analyst Views on Broadcom

Understanding market sentiments and expectations within the industry is crucial for investors. This analysis delves into the latest insights on Broadcom ( AVGO ).

With 5 analyst ratings, Broadcom ( AVGO ) has a consensus rating of Buy. The average one-year price target is $211.0, indicating a potential 22.81% upside.

Peer Ratings Overview

The below comparison of the analyst ratings and average 1-year price targets of Advanced Micro Devices, Qualcomm and Texas Instruments, three prominent players in the industry, gives insights for their relative performance expectations and market positioning.

Advanced Micro Devices received a Outperform consensus from analysts, with an average 1-year price target of $188.44, implying a potential 9.68% upside.

For Qualcomm, analysts project an Neutral trajectory, with an average 1-year price target of $193.71, indicating a potential 12.75% upside.

Texas Instruments received a Neutral consensus from analysts, with an average 1-year price target of $217.69, implying a potential 26.7% upside.

Peers Comparative Analysis Summary

In the peer analysis summary, key metrics for Advanced Micro Devices, Qualcomm and Texas Instruments are highlighted, providing an understanding of their respective standings within the industry and offering insights into their market positions and comparative performance.

Company Consensus Revenue Growth Gross Profit Return on Equity
Broadcom ( AVGO ) Buy 47.27% $8.36B -2.77%
Advanced Micro Devices Outperform 17.57% $3.42B 1.36%
Qualcomm Neutral 18.69% $5.78B 11.46%
Texas Instruments Neutral -8.41% $2.47B 7.86%

Key Takeaway:

Broadcom ( AVGO ) ranks highest in revenue growth among its peers. It has the highest gross profit margin. However, it has the lowest return on equity. Overall, Broadcom ( AVGO ) is positioned at the top compared to its peers in this analysis.

Get to Know Broadcom Better

Broadcom ( AVGO ) is the sixth-largest semiconductor company globally and has expanded into various software businesses, with over $30 billion in annual revenue. It sells 17 core semiconductor product lines across wireless, networking, broadband, storage, and industrial markets. It is primarily a fabless designer but holds some manufacturing in-house, like for its best-of-breed FBAR filters that sell into the Apple iPhone. In software, it sells virtualization, infrastructure, and security software to large enterprises, financial institutions, and governments.Broadcom is the product of consolidation. Its businesses are an amalgamation of former companies like legacy Broadcom ( AVGO ) and Avago Technologies in chips, as well as Brocade, CA Technologies, and Symantec in software.

Key Indicators: Broadcom's Financial Health

Market Capitalization: Exceeding industry standards, the company's market capitalization places it above industry average in size relative to peers. This emphasizes its significant scale and robust market position.

Revenue Growth: Broadcom's ( AVGO ) revenue growth over a period of 3 months has been noteworthy. As of 31 July, 2024, the company achieved a revenue growth rate of approximately 47.27%. This indicates a substantial increase in the company's top-line earnings. In comparison to its industry peers, the company stands out with a growth rate higher than the average among peers in the Information Technology sector.

Net Margin: Broadcom's ( AVGO ) net margin is below industry standards, pointing towards difficulties in achieving strong profitability. With a net margin of -14.34%, the company may encounter challenges in effective cost control.

Return on Equity (ROE): Broadcom's ( AVGO ) ROE falls below industry averages, indicating challenges in efficiently using equity capital. With an ROE of -2.77%, the company may face hurdles in generating optimal returns for shareholders.

Return on Assets (ROA): Broadcom's ( AVGO ) ROA falls below industry averages, indicating challenges in efficiently utilizing assets. With an ROA of -1.09%, the company may face hurdles in generating optimal returns from its assets.

Debt Management: Broadcom's ( AVGO ) debt-to-equity ratio stands notably higher than the industry average, reaching 1.07. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

To track all earnings releases for Broadcom ( AVGO ) visit their earnings calendar on our site.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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