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

Zacks Equity Research

Qualcomm (QCOM) closed the most recent trading day at $87.02, moving -1.88% from the previous trading session. This move lagged the S&P 500's daily loss of 0.71%. Elsewhere, the Dow lost 0.81%, while the tech-heavy Nasdaq lost 0.79%.

Prior to today's trading, shares of the chipmaker had gained 7.39% over the past month. This has outpaced the Computer and Technology sector's gain of 7.25% and the S&P 500's gain of 4.77% in that time.

Investors will be hoping for strength from QCOM as it approaches its next earnings release. The company is expected to report EPS of $0.85, down 29.17% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $4.83 billion, down 0.35% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.12 per share and revenue of $21.88 billion. These totals would mark changes of +16.38% and -9.84%, respectively, from last year.

Any recent changes to analyst estimates for QCOM should also be noted by investors. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. QCOM is holding a Zacks Rank of #1 (Strong Buy) right now.

Looking at its valuation, QCOM is holding a Forward P/E ratio of 21.5. For comparison, its industry has an average Forward P/E of 26.97, which means QCOM is trading at a discount to the group.

Meanwhile, QCOM's PEG ratio is currently 1.54. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Wireless Equipment stocks are, on average, holding a PEG ratio of 3.2 based on yesterday's closing prices.

The Wireless Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 44, which puts it in the top 18% 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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