Shares of semiconductor firm Broadcom (AVGO) jumped in after-hours trading. This comes after the company reported earnings for its fourth quarter of Fiscal Year 2024, which were followed by solid guidance. Earnings per share came in at $1.42, which beat analysts’ consensus estimate of $1.39 per share. It’s worth noting that Broadcom has beaten earnings estimates in each of its past nine quarters.
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In addition, sales increased by 51.2% year-over-year, with revenue hitting $14.06 billion. This was essentially in line with analysts’ expectations of $14.07 billion. The massive surge in revenue can be attributed to the company’s VMware acquisition and AI semiconductor solutions.
The firm also announced a $0.59 per share dividend, which equates to a 1.3% annualized yield based on today’s closing price. However, it’s worth noting that the current yield is near the low end of its historical range, which indicates that the stock is relatively overvalued compared to the past for investors interested in income.
Guidance for Q4 2024:
Looking forward, management has provided the following guidance for Q1 2025:
- Revenue of $14.6 billion versus analysts’ estimates of $14.55 billion.
- Adjusted EBITDA margin of 66% compared to expectations of 62.9%.
As we can see, the company’s revenue and EBITDA outlook are better than expected, which likely led to the after-hours jump in the stock price.
Is AVGO Stock a Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AVGO stock based on 13 Buys, two Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 68% rally in its share price over the past year, the average AVGO price target of $200 per share implies 10.7% upside potential.
