Broadcom Inc. (AVGO) Soars to 52-Week High, Time to Cash Out?

Have you been paying attention to shares of Broadcom Inc. (AVGO)? Shares have been on the move with the stock up 28.4% over the past month. The stock hit a new 52-week high of $257.88 in the previous session. Broadcom Inc. has gained 10.8% since the start of the year compared to the -0.3% move for the Zacks Computer and Technology sector and the 4% return for the Zacks Electronics - Semiconductors industry.What's Driving the Outperformance?The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on March 6, 2025, Broadcom Inc. reported EPS of $1.6 versus consensus estimate of $1.5 while it beat the consensus revenue estimate by 2.03%.For the current fiscal year, Broadcom Inc. is expected to post earnings of $6.63 per share on $62.49 billion in revenues. This represents a 36.14% change in EPS on a 21.18% change in revenues. For the next fiscal year, the company is expected to earn $7.88 per share on $72.82 billion in revenues. This represents a year-over-year change of 18.8% and 16.53%, respectively.Valuation MetricsBroadcom Inc. may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.Broadcom Inc. has a Value Score of D. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.In terms of its value breakdown, the stock currently trades at 38.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 23.8X. On a trailing cash flow basis, the stock currently trades at 42.9X versus its peer group's average of 16.9X. Additionally, the stock has a PEG ratio of 2.03. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.Zacks RankWe also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Broadcom Inc. currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Broadcom Inc. fits the bill. Thus, it seems as though Broadcom Inc. shares could still be poised for more gains ahead.How Does AVGO Stack Up to the Competition?Shares of AVGO have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Nova Ltd. (NVMI). NVMI has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of C.Earnings were strong last quarter. Nova Ltd. beat our consensus estimate by 4.81%, and for the current fiscal year, NVMI is expected to post earnings of $8.47 per share on revenue of $863.7 million.Shares of Nova Ltd. have gained 8.2% over the past month, and currently trade at a forward P/E of 24.77X and a P/CF of 29.99X.The Electronics - Semiconductors industry is in the top 33% of all the industries we have in our universe, so it looks like there are some nice tailwinds for AVGO and NVMI, even beyond their own solid fundamental situation.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Broadcom Inc. (AVGO): Free Stock Analysis Report Nova Ltd. (NVMI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks