Broadcom Q1 Earnings preview: What to expect after stellar FY21 performance?
Broadcom (NASDAQ:AVGO) is scheduled to announce Q1 earnings results on Thursday, March 3rd, after market close.
The consensus EPS Estimate is $8.13 (+23.0% Y/Y) and the consensus Revenue Estimate is $7.61B (+14.3% Y/Y).
Over the last 2 years, AVGO has beaten EPS estimates 88% of the time and has beaten revenue estimates 88% of the time.
Over the last 3 months, EPS estimates have seen 23 upward revisions and 1 downward. Revenue estimates have seen 21 upward revisions and 1 downward.
Shares jumped 8.27% on December 10, a day after Broadcom posted another beat on top and bottom lines with its FQ4 results, and some more upbeat revenue guidance for the current quarter along with a new dividend hike and $10 billion buyback authorization.
For FQ1, it is guiding to revenue of $7.6B and EBITDA of about 61.5% of that, or around $4.67B. Shares have gained 20.15% in the last 12 months, as the broader semiconductor industry has rallied due to the global chip shortage, rising prices and continued strength in areas like mobile devices, electric vehicles and the Internet of Things.
A look at the 12-month price return performance of the stock against peers:

Analysts responded uniformly with price target increases following the Q4 performance. KeyBanc boosted its target to $710 from $575, while Piper Sandler noted that Broadcom is seeing very strong hyperscale demand and the enterprise market looks to be making a quick recovery. Cowen pointed to an unmatched margin and free cash flow profile, and that the new $10 billion buyback authorization shows its commitment to return on capital.
Most recently, Barclays raised its price target on the chipmaker, based on the stock trading at 19 times an estimated 2023 earnings of $37.53 per share, compared to 20 times the estimated $32.31 it's expected to earn this year.
However, Broadcom faced some pressure after it was reported that Apple is looking to develop wireless chips in-house and eventually replace those from Broadcom and Skyworks. A subsequent Bank of America research note said that fears of Broadcom's Apple business demise are "overblown in the near to medium term."
In a recent bullish analysis, SA contributor Stephen Simpson wrote, "Looking at 2022 and Broadcomâs next quarter, Iâm seeing strength almost across the board."