Broadcom Overpriced at Current Valuations

about 1 month ago

Parkev Tatevosian

"That's why I always caution investors when you're evaluating stocks that trade at premium valuations or at valuations above their historical levels that there's more downside than upside in some cases. That was the case with Broadcom and I warned investors about that going into the earnings release. I said it did not look like an attractive buying opportunity and one of the elements I pointed to was the company's increasing forward PE ratio which had soared from around 22 in January of 2024 all the way up close to 50 heading into the earnings release."

The analyst provides a clear warning on Broadcom stock, stating that its premium valuation—with a forward PE ratio that has nearly doubled from 22 to close to 50—is a significant downside catalyst, making it an unattractive buying opportunity at current prices.

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