Shares of semiconductor firm Broadcom (NASDAQ:AVGO) surged in after-hours trading. This comes after the company reported earnings for its second quarter of Fiscal Year 2024 and announced a 10-for-one stock split that will go into effect on July 15. Earnings per share came in at $10.96, which beat analysts’ consensus estimate of $10.85 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 43% year-over-year, with revenue hitting $12.487 billion. This also beat analysts’ expectations of $12.01 billion.
Looking forward, management now expects revenue and its adjusted EBITDA margin for FY 2024 to be roughly $51 billion and 61%, respectively. For reference, analysts were expecting $50.277 billion in revenue.
AVGO Stock Returns $2.4B to Shareholders
During the second quarter, AVGO returned over $2.443 billion to shareholders. Dividends made up the entire amount at $5.25 per share, as no buybacks were made during the quarter. This is fairly surprising since the firm had regularly repurchased its shares in each of the most recent quarters, as demonstrated in the image below.
Is AVGO Stock a Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AVGO stock based on 18 Buys, two Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 78% rally in its share price over the past year, the average AVGO price target of $1,590.42 per share implies 6.97% upside potential.
