Broadcom just reported $22.2 billion in quarterly revenue, up 48% from a year earlier, and its stock still fell 14% in a single day, dragging chip stocks into their sharpest selloff since early 2025. That is the puzzle every stock buyer eventually runs into: a company can post record numbers and still disappoint the market. Knowing what to look for before you buy is what separates investing from guessing.Before buying any stock, look at five things: consistent earnings and revenue growth, a reasonable valuation relative to those earnings, a balance sheet that is not overloaded with debt, a durable competitive advantage, and a fit with your own goals and time horizon.No single number tells the whole story, but together these checks reveal whether you are buying a healthy business at a fair price or paying up for hype.Earnings and Revenue GrowthStart with the income statement, which every U.S. public company files with the Securities and Exchange Commission and which you can read for free on SEC.gov's EDGAR database.Look for revenue that has grown steadily over the past three to five years, not just one strong quarter.Then check earnings per share, or EPS, which is the company's profit divided by its share count.A company growing revenue 10% a year while EPS grows 15% is becoming more profitable as it scales, which is exactly the pattern long-term investors want.Just as important is the guidance management gives about future quarters, since markets price in expectations, not history.Broadcom's June selloff is the textbook case: the company beat estimates, but its $16 billion AI chip forecast came in below the $17.2 billion analysts expected, and the stock paid for it.ValuationA great company can still be a bad investment if you overpay for it.The most common yardstick is the price-to-earnings ratio, which divides the stock price by EPS and tells you how many dollars you are paying for each dollar of annual profit.The S&P 500 has historically traded at a P/E in the range of 15 to 20, so a stock at 60 times earnings needs exceptional growth to justify its price.For fast growers, the PEG ratio, which divides P/E by the expected earnings growth rate, gives a fairer picture, with readings below 1.0 generally suggesting reasonable value.If you want to go deeper on these metrics, Benzinga's guide on how to analyze a stock walks through P/E, debt-to-equity, and the other core ratios step by step.Debt and Balance Sheet StrengthPull up the balance sheet and compare total debt to shareholder equity.A debt-to-equity ratio above 2.0 means the company is financing itself heavily with borrowed money, which becomes expensive fast when rates stay elevated.You can track the current federal funds rate, which drives corporate borrowing costs, directly at the Federal Reserve.Companies with low debt and strong free cash flow have the flexibility to survive downturns, buy back shares, and raise dividends.Dividends and Cash FlowIf income matters to you, check the dividend yield, the payout ratio, and the company's track record of raising its dividend through recessions.A payout ratio above 80% of earnings leaves little cushion, and a yield that looks too generous often signals a stock price that has collapsed for a reason.Benzinga maintains a regularly updated list of the best high dividend paying stocks along with the warning signs of an unsustainable payout.Competitive Position and ManagementNumbers describe the past, but a company's moat protects its future.Ask whether the business has pricing power, switching costs, network effects, or a brand that competitors cannot easily copy.This month's chip rout showed how quickly a moat can be questioned: part of Broadcom's decline came from analysts flagging that MediaTek is taking a share of its custom AI chip work for Alphabet.Read the most recent annual report's letter to shareholders, and check whether executives own meaningful amounts of stock themselves.How the Stock Fits Your PortfolioA stock that checks every box still needs to fit your situation, including your time horizon, your risk tolerance, and how concentrated your portfolio already is in that sector.Volatile weeks like this one, when the Nasdaq fell 4% in a single session, are easier to ride out when no single position dominates your account.If you do not have an account yet, SoFi offers commission-free stock trading and fractional shares, so you can start with a small position while you build conviction in a company.For the mechanics of order types, funding an account, and placing your first trade, see Benzinga's beginner guide on how to buy stocks.Whatever you buy, set a calendar reminder for the company's next earnings date, because the thesis you buy on is only as good as the numbers that come out four times a year.