Qualcomm Stock Downtrends in Fiscal 1Q16
Gear up for Qualcomm: Anticipating QCOM's Fiscal 1Q16 Earnings
Qualcomm’s stock at a glance
Previously in this series, we saw that Qualcomm (QCOM) is expected to report lower revenues and flat EPS (earnings per share) in fiscal 1Q16. This is because the headwinds that plagued its fiscal 4Q15 earnings will likely affect its fiscal 1Q16 earnings as well. While the company’s performance won’t be revealed until January 27, 2016, let’s look at the company’s stock performance during fiscal 1Q16.
The company has a market capitalization of $69.28 billion and a price-to-earnings ratio of 14.31. This means that Qualcomm’s stock is currently priced at 14 times its EPS.
Qualcomm’s stock price movement
Qualcomm’s stock is currently hovering at $44–$45, which is at the lower end of its 52-week range of $45.13–$74.09. The stock fell sharply on the following three instances:
First, it fell on November 4, 2015, after the company announced its fiscal 4Q15 results, which posted weaker guidance.
Second, the stock fell on November 18, 2015, when it faced antitrust charges from South Korea (EWY).
Third, the stock fell on December 8, 2015, when it faced an antitrust investigation from Taiwan.
Qualcomm’s stock rose on two instances—when the company announced Snapdragon 820 on December 7, 2015, and again when it inked a licensing deal with China’s Tianyu on December 29, 2015.
While Qualcomm’s stock tapered downwards over the last three months of 2015, Avago Technologies (AVGO), Intel Corporation (INTC), and Skyworks Solutions’ (SWKS) stocks rallied. These are the companies with whom Qualcomm competes within the adjacent market, and the upward movement of these stocks indicates that there is growth potential in these markets.
Analyst ratings for Qualcomm
Analysts have set an average 12-month price target of $62.20 for Qualcomm’s stock, with the most bearish estimate of $47 and the most bullish estimate of $78.50. The company announced a dividend of $0.48 per share, which is due to be paid on March 2, 2016. This equates to an annual yield of $1.92 and a yield of 4.19%.
The company’s stock will likely rally if, on January 27, 2016, the company posts strong fiscal 2Q16 guidance in addition to new product wins and new licensing deals.
Browse this series on Market Realist:
