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

Zacks Equity Research

In the latest trading session, Qualcomm (QCOM) closed at $81.66, marking a -1.67% move from the previous day. This move lagged the S&P 500's daily loss of 0.08%. At the same time, the Dow lost 0.07%, and the tech-heavy Nasdaq lost 0.59%.

Heading into today, shares of the chipmaker had gained 8.88% over the past month, outpacing the Computer and Technology sector's gain of 4.71% and the S&P 500's gain of 2.7% in that time.

Wall Street will be looking for positivity from QCOM as it approaches its next earnings report date. This is expected to be November 6, 2019. On that day, QCOM is projected to report earnings of $0.71 per share, which would represent a year-over-year decline of 21.11%. Our most recent consensus estimate is calling for quarterly revenue of $4.72 billion, down 18.7% from the year-ago period.

Investors might also notice recent changes to analyst estimates for QCOM. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection remained stagnant. QCOM is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that QCOM has a Forward P/E ratio of 20.85 right now. For comparison, its industry has an average Forward P/E of 20.96, which means QCOM is trading at a discount to the group.

It is also worth noting that QCOM currently has a PEG ratio of 1.63. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Wireless Equipment industry currently had an average PEG ratio of 2.68 as of yesterday's close.

The Wireless Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 161, which puts it in the bottom 37% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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