Broadcom’s Q1 Results Surpass Estimates; Street Says Buy

Semiconductor and infrastructure software products manufacturer Broadcom Inc. (NASDAQ: AVGO) has reported better-than-expected results for the first quarter ended January 30, 2022.

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Following the results, shares of the company rose 2.5% to close at $593 in Thursday’s extended trading session.

Revenue & Earnings

Broadcom reported quarterly net revenues of $7.7 billion, up 15.8% from the same quarter last year. Further, the figure surpassed the consensus estimate of $7.6 billion. Semiconductor solutions and Infrastructure software, the major revenue segments, grew 20% and 5% year-over-over to $5.9 billion and $1.8 billion, respectively, and drove the overall growth in revenues.

The company’s earnings for the quarter stood at $8.39 per share, up 27% year-over-year. Further, the figure surpassed the consensus estimate of $8.08 per share.

Meanwhile, Broadcom reported an adjusted EBITDA of $4.8 billion at the end of the quarter, up from $3.9 billion a year ago.

Free cash flow also witnessed a rise of 12.9% year-over-year to $3.4 billion.

Outlook

For the second quarter, the company anticipates revenues of $7.9 billion against the consensus estimate of $7.43 billion.

Management Commentary

The CEO of Broadcom, Hock Tan, said, “Broadcom’s record first quarter results were driven by strong enterprise demand, and continued investments in next generation technology by hyperscale and service providers. Our second quarter outlook projects year-over-year growth to accelerate.”

Stock Rating

On March 3, Mizuho Securities analyst Vijay Rakesh reiterated a Buy rating on the stock with a price target of $700, which implies upside potential of 21% from current levels.

Consensus among analysts is a Strong Buy based on 20 Buys and 3 Holds. The average Broadcom stock prediction of $690.77 implies upside potential of 19.4% from current levels. Shares have gained 30.4% over the past year.

Positive News Sentiment

News Sentiment for AVGO is Very Positive based on 65 articles over the past seven days. 100% of the articles have Bullish sentiment, compared to a sector average of 64%.

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