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Qualcomm (QCOM) Dips More Than Broader Markets: What You Should Know

·3 min read

In the latest trading session, Qualcomm (QCOM) closed at $124.98, marking a -2% move from the previous day. This change lagged the S&P 500's 1.13% loss on the day. Elsewhere, the Dow lost 0.56%, while the tech-heavy Nasdaq added 0.03%.

Coming into today, shares of the chipmaker had lost 14.14% in the past month. In that same time, the Computer and Technology sector lost 12.18%, while the S&P 500 lost 7.59%.

Qualcomm will be looking to display strength as it nears its next earnings release. On that day, Qualcomm is projected to report earnings of $3.15 per share, which would represent year-over-year growth of 23.53%. Meanwhile, our latest consensus estimate is calling for revenue of $11.38 billion, up 21.91% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $12.47 per share and revenue of $44.17 billion. These totals would mark changes of +46.02% and +31.58%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Qualcomm. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Qualcomm is currently a Zacks Rank #3 (Hold).

Digging into valuation, Qualcomm currently has a Forward P/E ratio of 10.23. This represents a discount compared to its industry's average Forward P/E of 17.18.

Also, we should mention that QCOM has a PEG ratio of 0.65. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Wireless Equipment stocks are, on average, holding a PEG ratio of 1.87 based on yesterday's closing prices.

The Wireless Equipment industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 60, putting it in the top 24% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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