## Broadcom (AVGO) Earnings Preview: What to Expect on December 12th, 2024
Broadcom (AVGO), a global semiconductor giant, is set to release its highly anticipated fourth-quarter 2024 earnings report on Thursday, December 12th, 2024. This announcement will be closely scrutinized by investors, as it could significantly impact the company’s stock price. While analysts project an earnings per share (EPS) of $1.39, the real focus will be on the company’s guidance—its forecast for the next quarter. Past experience shows that it’s not just whether Broadcom beats or misses earnings estimates that moves the market; the future outlook is often the more decisive factor.
### A Look Back: Broadcom’s Recent Performance
Broadcom’s recent history shows a pattern of fluctuating performance and stock price reactions. In the last quarter (Q3 2024), the company exceeded EPS estimates by $0.04, yet this positive result was followed by a 10.36% drop in share price. This illustrates the importance of guidance in influencing investor sentiment. Here’s a quick snapshot of Broadcom’s recent earnings and subsequent stock price changes:
| Quarter | EPS Estimate | EPS Actual | Price Change (%) |
|—|—|—|—|
| Q3 2024 | $1.20 | $1.24 | -10.0% |
| Q2 2024 | $1.08 | $1.10 | 12.0% |
| Q1 2024 | $1.03 | $1.10 | -7.0% |
| Q4 2023 | $1.10 | $1.11 | 2.0% |
As of December 10th, Broadcom shares were trading at $171.81. Despite short-term volatility, the stock has seen impressive growth over the past 52 weeks, with a 55.27% increase. This positive long-term trend should offer some comfort to existing investors.
### Analyst Sentiment and Peer Comparisons
Understanding market sentiment is critical for informed investment decisions. Current analyst ratings paint a broadly positive picture for Broadcom. With a consensus rating of “Buy” from 5 analysts, and an average one-year price target of $211.00, this suggests a potential upside of 22.81%.
To put Broadcom’s performance into context, let’s compare it to its key competitors: Advanced Micro Devices (AMD), Qualcomm (QCOM), and Texas Instruments (TXN).
| Company | Consensus Rating | Average 1-Year Price Target | Potential Upside (%) |
|——————–|—————–|—————————–|———————–|
| Broadcom | Buy | $211.00 | 22.81% |
| Advanced Micro Devices | Outperform | $188.44 | 9.68% |
| Qualcomm | Neutral | $193.71 | 12.75% |
| Texas Instruments | Neutral | $217.69 | 26.7% |
Key Comparative Metrics:
| Company | Consensus Revenue Growth | Gross Profit | Return on Equity |
|——————–|—————————|—————|——————-|
| Broadcom | 47.27% | $8.36B | -2.77% |
| Advanced Micro Devices | 17.57% | $3.42B | 1.36% |
| Qualcomm | 18.69% | $5.78B | 11.46% |
| Texas Instruments | -8.41% | $2.47B | 7.86% |
This peer comparison reveals that while Broadcom boasts the highest revenue growth and gross profit margin, it lags behind in return on equity. However, overall, Broadcom maintains a strong position compared to its peers.
### Understanding Broadcom: A Deeper Dive
Broadcom, the sixth-largest semiconductor company globally, generates over $30 billion in annual revenue. Its diverse portfolio spans 17 core semiconductor product lines, catering to wireless, networking, broadband, storage, and industrial markets. Beyond semiconductors, Broadcom is a significant player in software, offering virtualization, infrastructure, and security solutions to large enterprises and governments. The company’s current form is the result of significant mergers and acquisitions, integrating legacy Broadcom, Avago Technologies, Brocade, CA Technologies, and Symantec.
### Key Financial Indicators:
*
Market Capitalization:
Significantly above industry average, reflecting Broadcom’s substantial market presence.*
Revenue Growth (3 months to July 31, 2024):
A remarkable 47.27%, exceeding industry averages.*
Net Margin:
Below industry standards at -14.34%, indicating potential cost management challenges.*
Return on Equity (ROE):
Below industry average at -2.77%, signaling inefficiencies in capital utilization.*
Return on Assets (ROA):
Below industry average at -1.09%, highlighting challenges in asset utilization.*
Debt Management:
A debt-to-equity ratio of 1.07, considerably higher than the industry average, raises concerns about financial leverage.The December 12th earnings report will provide crucial insights into Broadcom’s future trajectory. Investors should closely monitor not only the EPS results but also the provided guidance to make well-informed investment decisions. Stay tuned for updates on our site for the full earnings release.
