Broadcom
Over the past 12 months, shares of Broadcom Inc. (NASDAQ: AVGO) have declined by nearly 11%. That is actually the third-best performance among the semiconductor stocks we track and considerably less than the losses of 50% or more at AMD, Marvell and Nvidia.
The big news from Broadcom is its pending $61 billion acquisition of VMware. U.K. regulators accepted comments on the merger until Tuesday and are likely to decide soon whether to launch a full-on investigation of the deal. EU regulators have agreed to decide later this month whether an investigation is called for. The U.S. Federal Trade Commission is reviewing the deal and has twice asked Broadcom for additional details.
Analysts remain strongly bullish on the stock, with 22 of 26 having Buy or Strong Buy ratings. The other four rate the shares at Hold. At a recent price of around $525.80 a share, the potential upside based on a median price target of $650.00 is 23.6%. Based on a high price target of $775.00, the upside potential is 47.4%.
For Broadcom’s fiscal 2022 fourth quarter that ended in October, analysts are looking for revenue of $8.9 billion, which would be up 5.2% sequentially and by 6.6% year over year. Adjusted EPS are forecast at $10.29, up 5.7% sequentially and 31.8% higher year over year. For the full fiscal year, current estimates call for EPS of $37.50, up almost 34%, on sales of $33.17 billion, up 20.8%.
Broadcom trades at 14.0 times expected 2022 EPS, 13.0 times estimated 2023 earnings of $40.41 and 12.3 times estimated 2024 earnings of $42.92 per share. The stock’s 52-week trading range is $415.07 to $677.76. Broadcom pays an annual dividend of $16.40 (yield of 3.09%). Total shareholder return for the past year was negative 8.25%.
DocuSign
Shares of cloud-based signature and contract management software vendor DocuSign Inc. (NASDAQ: DOCU) have dropped by about 72% over the past 12 months. DocuSign fired about 9% of its workforce in September, but that may not make a large difference in the results it reports Thursday afternoon. Sales have been growing, but the gains have been small. Earnings also have been smaller over the first two quarters of the current fiscal year, and analysts are really in a holding pattern, waiting to see which way the company’s performance breaks.
Of 22 brokerages covering the company, five have rated the stock at Buy or Strong Buy and 14 have a Hold rating. At a share price of around $41.40, the upside potential based on a median price target of $59.35 is about 43.3%. At the high price target of $93.00, the upside potential is nearly 125%.
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