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

·3 min read

Qualcomm (QCOM) closed the most recent trading day at $121.34, moving -1.83% from the previous trading session. This move lagged the S&P 500's daily loss of 0.16%. Meanwhile, the Dow lost 0.12%, and the Nasdaq, a tech-heavy index, lost 3.64%.

Coming into today, shares of the chipmaker had gained 0.15% in the past month. In that same time, the Computer and Technology sector gained 6.7%, while the S&P 500 gained 0.07%.

Investors will be hoping for strength from Qualcomm as it approaches its next earnings release. The company is expected to report EPS of $2.15, down 33.02% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $9.06 billion, down 18.82% from the year-ago period.

QCOM's full-year Zacks Consensus Estimates are calling for earnings of $9.52 per share and revenue of $37.99 billion. These results would represent year-over-year changes of -24.02% and -14.05%, respectively.

It is also important to note the recent changes to analyst estimates for Qualcomm. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 has moved 0.2% lower within the past month. Qualcomm currently has a Zacks Rank of #3 (Hold).

Investors should also note Qualcomm's current valuation metrics, including its Forward P/E ratio of 12.99. This valuation marks a premium compared to its industry's average Forward P/E of 12.05.

Investors should also note that QCOM has a PEG ratio of 0.83 right now. 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. The Wireless Equipment industry currently had an average PEG ratio of 2.53 as of yesterday's close.

The Wireless Equipment industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 73, putting it in the top 29% 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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