Earnings Preview: What To Expect From Broadcom Today

Broadcom Inc. AVGO is scheduled to report earnings after Thursday’s close. The stock just hit a record high of $507.85/share and is currently trading near $490/share. 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 earnings of $6.85/share on $6.76 billion in revenue. Meanwhile, the so-called Whisper number is a gain of $7.13/share. The Whisper number is the Street’s unofficial view on earnings.

A Closer Look At The Fundamentals:

The company is attractively valued and sports a P/E ratio of only 20, which is much lower than many other tech stocks. The company has managed to grow its earnings by double digits in each of the past three quarters which is also a very impressive feat for a company this big.

A Closer Look At The Technicals:

Technically, the stock is acting very well and is a near textbook example of what a healthy stock looks like. The stock just broke out of a long multi-month base and hit a new record high. Now, it’s pulling back to digest the move as investors wait for earnings to be released. The action, at this point, remain bullish. Now, if the stock gaps down after earnings are announced that will change the equation. But until we see any major selling, the bulls remain in clear control.

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.