Broadcom is scheduled to report earnings after Wednesday’s close. The stock just hit a record high of $1505.80 and is currently trading near that level. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:
Earnings Preview
The company is expected to report a gain of $10.80/share on $10.80 billion in revenue. Meanwhile, the so-called Whisper number is a gain of $11.14/share. The Whisper number is the Street’s unofficial view on earnings.
A Closer Look At The Fundamentals
The company has grown its earnings nicely over the last few years. In 2020, the company earned $22.16, in 2021 earnings grew to $28.01, then jumped to $37.64 in 2022, and then grew in 2023 to $42.25. Looking forward, earnings are expected to fall to $35.94 in 2024 and then earnings are expected jump to $49.27 in 2025. That is a big jump in a few short years and a lot of that growth is expected to come from strong demand for A.I.
A Closer Look At The Technicals
Technically, the stock acting very strong and just hit a fresh all-time high! The stock is also trading above all its important moving averages which is a strong sign. Strong stocks tend to be above their rising 50 and 200 DMA lines. Separately, it is encouraging to see the number of high ranked funds that own the stock grow from 4273 in the quarter ending in June 2023 to 5067 in the quarter ending March 2024. That is a strong sign of institutional accumulation.
Company Profile
Broadcom Inc. designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide.
The company operates in two segments, Semiconductor Solutions and Infrastructure Software. It provides set-top box system-on-chips (SoCs); cable, digital subscriber line, and passive optical networking central office/consumer premise equipment SoCs; wireless local area network access point SoCs; Ethernet switching and routing custom silicon solutions; serializer/deserializer application specific integrated circuits; optical and copper, and physical layer devices; and fiber optic components and RF semiconductor devices.
The company also offers RF front end modules and filter; Wi-Fi, Bluetooth, and global positioning system/global navigation satellite system SoCs; custom touch controllers; inductive charging; attached small computer system interface, and redundant array of independent disks controllers and adapters; peripheral component interconnect express; fiber channel host bus adapters; read channel based SoCs; custom flash controllers; preamplifiers; optocouplers, industrial fiber optics, and motion control encoders and subsystems; light emitting diode, ethernet PHYs, switch ICs, and camera microcontrollers.
Its products are used in various applications, including enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Broadcom Inc. was founded in 1961 and is headquartered in Palo Alto, California.
Pay Attention To How The Stock Reacts To The News
From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.
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