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Forbes
11 hours ago
- Business
- Forbes
Buy Or Sell AVGO Stock Ahead Of Its Upcoming Earnings?
SUQIAN, CHINA - MARCH 9, 2025 - An illustration photo shows the Broadcom LOGO displayed on a ... More smartphone in Suqian, Jiangsu province, China on March 9, 2025. (Photo credit should read CFOTO/Future Publishing via Getty Images) Broadcom (NASDAQ:AVGO) is scheduled to report its earnings on Thursday, June 5, 2025. Historically, AVGO stock has often seen a positive reaction to its earnings announcements. Over the past five years, the stock has posted positive one-day returns in a strong 80% of instances, with a median gain of 2.9% and a maximum one-day jump of 24.4%. While actual results will heavily influence stock performance, understanding these historical patterns can give event-driven traders an edge. Here are two main approaches: Analysts project Broadcom to report earnings of $1.57 per share on sales of $14.97 billion. This marks a significant improvement from the prior year's quarter, which saw earnings of $1.10 per share on sales of $12.49 billion. This anticipated growth is expected to be fueled by the continued expansion of Broadcom's AI-related custom chips and Ethernet products. Investors will also be closely watching trends in custom ASIC sales. From a fundamental standpoint, Broadcom currently boasts a market capitalization of $1.1 trillion. Over the last twelve months, the company generated $55 billion in revenue and was operationally profitable, with $19 billion in operating profits and a net income of $10 billion. That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative - having outperformed the S&P 500 and generated returns exceeding 91% since its inception. Separately, see – Merck Stock's Ticking Keytruda Time earnings reaction history of all stocks Some observations on one-day (1D) post-earnings returns: Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below. AVGO 1D, 5D, and 21D Post Earnings Return A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves "long" for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns. AVGO Correlation Between 1D, 5D and 21D Historical Returns Sometimes, peer performance can have influence on post-earnings stock reaction. In fact, the pricing-in might begin before the earnings are announced. Here is some historical data on the past post-earnings performance of Broadcom stock compared with the stock performance of peers that reported earnings just before Broadcom. For fair comparison, peer stock returns also represent post-earnings one-day (1D) returns. AVGO Correlation With Peer Earnings Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (combination of all 3, the S&P 500, S&P mid-cap, and Russell 2000), to produce strong returns for investors. Separately, if you want upside with a smoother ride than an individual stock like Broadcom, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.
RTHK
4 days ago
- Automotive
- RTHK
Beijing clamps down in bid to stop auto price wars
Beijing clamps down in bid to stop auto price wars BYD's incentives for buyers include taking the cost of one of its Seagull electric hatchbacks to as little as 55,800 yuan. Photo: CFOTO/AFP China urged its automotive industry to halt brutal price wars, calling them a threat to the sector's health and sustainable development, after key executives jousted over pricing pressure following large discounts offered to buyers. Tension between some top players in the world's largest auto market has spilled into the open as competition intensifies, with price wars begun in early 2023 showing little sign of abating, despite concern among both government and industry. The Ministry of Industry and Information Technology vowed to step up efforts to correct what it called excessive competition, the official news agency Xinhua said on Saturday. "There are no winners in a 'price war', let alone a future," the agency cited an unidentified ministry official as saying. The comments came after fresh incentives offered last week on more than 20 models by electric vehicle giant BYD, that prompted several rivals, such as Geely and Chery, to follow suit. The ministry's comments echo a similar call, also made on Saturday, by the China Association of Auto Manufacturers for a truce in the price wars, saying they affect profitability and efficiency. It added that a new round of price war "panic" was touched off in China after substantial discounts offered on May 23 by an automaker it did not identify. It proposed remedies such as auto companies sticking to the principle of fair competition and larger players refraining from market monopolies. "Apart from reducing the price of goods according to law, enterprises shall not dump goods at prices below cost," it added. BYD's incentives, which include government trade-in subsidies, can cut the domestic cost of its BYD Seagull electric hatchback to as little as 55,800 yuan. On Friday, a BYD executive had decried as alarmist comments by the chief of Great Wall Motor that the industry was "unhealthy". Great Wall's Wei Jianjun had said pricing pressure was hammering the bottom lines of car companies and suppliers. (Reuters)
Forbes
27-05-2025
- Business
- Forbes
Should You Buy AVGO Stock At $230?
SUQIAN, CHINA - MARCH 9, 2025 - An illustration photo shows the Broadcom LOGO displayed on a ... More smartphone in Suqian, Jiangsu province, China on March 9, 2025. (Photo credit should read CFOTO/Future Publishing via Getty Images) Broadcom (NASDAQ:AVGO) stock is up nearly 45% in the last six months, significantly outperforming the broader Nasdaq index, down 1%. This strong performance is largely due to the company's rising sales, up 40% in the last twelve months. A major driver of this growth is Broadcom's AI product line, which saw an impressive 220% year-over-year increase in revenue to $12.2 billion in fiscal year 2024, fueled by high demand for its custom AI accelerators (XPUs) and Ethernet products. Broadcom is strategically positioned to capitalize on the generative AI surge with its extensive suite of networking, storage, cybersecurity, and semiconductor offerings. Considering this strong performance, we believe AVGO stock is a good buy at its current price of around $230. While its current valuation is extremely high, making it sensitive to adverse events, we see minimal cause for concern. Our conclusion is based on comparing AVGO's current valuation with its recent operating performance and its current and historical financial health. Our analysis across key parameters—Growth, Profitability, Financial Stability, and Downturn Resilience—shows that Broadcom has a very strong operating performance and financial condition. That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative - having outperformed the S&P 500 and generated returns exceeding 91% since its inception. Also, see – Should You Buy MRK Stock At $80? Going by what you pay per dollar of sales or profit, AVGO stock looks very expensive compared to the broader market. Broadcom's Revenues have grown considerably over recent years. Broadcom's profit margins are much higher than most companies in the Trefis coverage universe. Broadcom's balance sheet looks strong. AVGO stock has been less resilient than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes. In summary, Broadcom's performance across the parameters detailed above are as follows: AVGO stock has performed exceptionally well across these parameters. While the stock's valuation is currently high, it appears justifiable given its massive sales growth and solid operating cash flow margins of around 40%. Therefore, despite its extremely high valuation, the stock remains attractive, supporting our conclusion that AVGO is a good buy. However, investors should be aware of certain risks. The stock's high valuation makes it more prone to significant declines during adverse events, as demonstrated by its larger corrections than the broader market in two of the last three market crashes. Additionally, any slowdown in AI spending by companies would directly impact Broadcom's growth. Overall, investors should carefully consider these potential risks before investing in AVGO. Not too happy about the volatile nature of AVGO stock? The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.
Miami Herald
21-05-2025
- Business
- Miami Herald
Former tech stock high-flyer prepares to file for bankruptcy
"Predicting rain doesn't count. Building arks does," Warren Buffett once said. However, today's harsh and turbulent economic environment makes it hard not just to make predictions, but also to be prepared for everything that could happen. Take the Covid pandemic, for example. Was anyone expecting something like this? And even if someone had, what could non-essential businesses have done to prepare? Related: Quantum computing news sends D-Wave Quantum's stock price surging While the pandemic was extraordinary and unexpected, certainly other scenarios can be anticipated - and prepared for. Adapting to the current environment is one of the skills every business leader should have. In today's challenging climate of tariff uncertainties, inflation, and rising interest rates, many experts are betting big on the future of technology. That's because technology is one of a few industries relatively immune to economic turbulence. Its superpower lies in its versatility. Technology is everywhere. It's the machines on farms that help produce food, it's the medical devices that save our lives, it's the transportation that helps us reach places that would otherwise be inaccessible. Even people who are in rural areas are becoming increasingly dependent on technology. While it's true that we're often surrounded by more technology than we truly need and that it also brings adverse consequences, it is highly unlikely things will change in the near future. But even a booming industry doesn't guarantee success for every company in the space. Images ource: CFOTO/Future Publishing via Getty Images The semiconductor sector is one of the fastest-growing sub-industries, which saw strong growth in 2024, hitting sales of $627 billion. Experts predict that it is on track to reach $1 trillion in chip sales by 2030. Companies focused on the generative AI chip market were deemed leaders, according to the Deloitte Center for Technology, Media & Telecommunications, while others faced challenges. One semiconductor stock that used to be a high-flier will soon be filing for bankruptcy. Related: Billionaire Stanley Druckenmiller quintuples stake in top semiconductor stock Wolfspeed (WOLF) went public more than 30 years ago. Over the last five years, its stock has dropped 98.38%. It reached its highest price on November 16, 2021, hitting $141.87. Now, it trades at 83 cents per share. What sets apart Wolfspeed from other semiconductor companies is its focus on next-generation technology that improves efficiency and sustainability. Its core focus is on silicon carbide (SiC) semiconductors, which offer significant advantages over traditional silicon - most notably, a breakdown electric field strength up to 10 times higher, allowing for the design of power devices that handle voltages ranging from 600 to several thousand volts. More on technology: T-Mobile fights to keep a misleading advertising claimElon Musk's SpaceX plans raise major red flags for regulatorsBillionaire Bill Ackman buys $2.8 billion of surging tech stock On May 8, reports surfaced that the company is considering bankruptcy after not being able to reach an agreement regarding a bond restructuring. A few days later, its junior creditor offered $600 million in rescue financing to refinance a large convertible bond coming due in 2026. Wolfspeed's senior lender holds authority over the company's capacity to take on additional secured debt, raising concerns among convertible bondholders such as Balyasny and Shaolin Capital about the risk of an early bankruptcy. In such a scenario, Apollo Global Management and its allies could take the lead in restructuring efforts, potentially sidelining junior creditors. The Wall Street Journal exclusively reported on May 20 that Wolfspeed is preparing to file for "prepackaged" bankruptcy within weeks, citing sources familiar with the matter. Following the news, shares dropped 68.53% on Wednesday, trading at $0.99 as of 11:48 a.m. ET. A prepackaged bankruptcy involves a company negotiating a restructuring plan with its creditors before formally filing for Chapter 11. This approach, which requires shareholder approval prior to the bankruptcy petition, is designed to reduce costs and accelerate the company's exit from bankruptcy proceedings. Betting on its U.S.-based manufacturing advantage over Chinese competitors, Wolfspeed made significant production investments, expecting electric vehicle demand to drive annual revenues past $800 million. Related: Apple users will hate the latest news from Capitol Hill But EV sales fell short of projections. In the third quarter of fiscal 2025, Wolfspeed reported $185 million in revenue - down from $201 million during the same period in 2024 - and a net loss of $1.86 million, compared to a $1.18 million loss a year earlier. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Forbes
29-04-2025
- Business
- Forbes
Will U.S. Steel's Earnings Move The Stock?
CHONGQING, CHINA - APRIL 20, 2025 - Steel piled up at Guoyuan Port in Chongqing, China on April 20, ... More 2025 (Photo credit should read CFOTO/Future Publishing via Getty Images) United States Steel (NYSE:X) is scheduled to announce its earnings on May 1, 2025. The company has a current market capitalization of $9.6 billion. Over the past twelve months, revenue totaled $16 billion, and it was operationally profitable with $155 million in operating profits and net income of $384 million. However, if you are looking for growth with lower volatility than individual stocks, the Trefis High Quality portfolio offers an alternative – having surpassed the S&P 500 and delivered returns exceeding 91% since its inception. View earnings reaction history of all stocks Some insights on one-day (1D) post-earnings returns: Supplementary data for 5-Day (5D) and 21-Day (21D) returns post earnings are summarized, along with the statistics in the table below. X 1D, 5D, and 21D Post Earnings Return A relatively lower-risk strategy (though not effective if the correlation is weak) is to analyze the correlation between short-term and medium-term returns following earnings, identify a pair that demonstrates the highest correlation, and carry out the suitable trade. For instance, if the correlation between 1D and 5D displays the highest correlation, a trader can position themselves "long" for the subsequent 5 days if the 1D post-earnings return is positive. Here are some correlation statistics derived from 5-year and 3-year (more recent) histories. Note that the correlation 1D_5D refers to the relationship between 1D post-earnings returns and the ensuing 5D returns. X Correlation Between 1D, 5D, and 21D Historical Returns Occasionally, the performance of peers can affect post-earnings stock reactions. In fact, the pricing-in might commence prior to the earnings announcements. Here is some historical information on the past post-earnings performance of United States Steel stock in comparison with the stock performance of peers that announced earnings just ahead of United States Steel. For an equitable comparison, peer stock returns also portray post-earnings one-day (1D) returns. X Correlation With Peer Earnings Discover more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (encompassing all 3, the S&P 500, S&P mid-cap, and Russell 2000), generating robust returns for investors. Additionally, if you seek growth with a steadier experience than an individual stock like United States Steel, consider the High Quality portfolio, which has outstripped the S&P and recorded >91% returns since inception.
