What To Expect From Broadcom’s (AVGO) Q3 Earnings

Radek Strnad /
2022/08/31 5:11 am EDT

Fabless chip and software maker Broadcom (NASDAQ:AVGO) will be announcing earnings results tomorrow after market close. Here's what to expect.

Last quarter Broadcom reported revenues of $8.1 billion, up 22.5% year on year, beating analyst revenue expectations by 2.46%. It was a decent quarter for the company, with a very optimistic guidance for the next quarter but an increase in inventory levels.

Is Broadcom buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Broadcom's revenue to grow 24% year on year to $8.4 billion, improving on the 16.4% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $9.55 per share.

Broadcom Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 1.04%.

Looking at Broadcom's peers in the processors and graphics chips segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. AMD delivered top-line growth of 70.1% year on year, beating analyst estimates by 0.31% and Qualcomm reported revenues up 35.6% year on year, exceeding estimates by 0.76%. AMD traded down 4.73% on the results, and Qualcomm was down 2.22%. Read our full analysis of AMD's results here and Qualcomm's results here.

The whole sector has been facing a sell-off since late last year, with stocks down on average 7.79% over the last month. Broadcom is down 4.42% during the same time, and is heading into the earnings with analyst price target of $672.6, compared to share price of $509.4.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.