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

Zacks Equity Research

Qualcomm (QCOM) closed at $88.23 in the latest trading session, marking a -1.03% move from the prior day. This change lagged the S&P 500's 0.09% loss on the day. Meanwhile, the Dow gained 0.04%, and the Nasdaq, a tech-heavy index, added 0.06%.

Heading into today, shares of the chipmaker had gained 1.04% over the past month, lagging the Computer and Technology sector's gain of 4.55% and the S&P 500's gain of 1.26% 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 February 5, 2020. In that report, analysts expect QCOM to post earnings of $0.85 per share. This would mark a year-over-year decline of 29.17%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.83 billion, down 0.35% from the year-ago period.

QCOM's full-year Zacks Consensus Estimates are calling for earnings of $4.12 per share and revenue of $21.88 billion. These results would represent year-over-year changes of +16.38% and -9.84%, respectively.

It is also important to note the recent changes to analyst estimates for QCOM. 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. 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 currently has a Zacks Rank of #3 (Hold).

Investors should also note QCOM's current valuation metrics, including its Forward P/E ratio of 21.61. This represents a no noticeable deviation compared to its industry's average Forward P/E of 21.61.

It is also worth noting that QCOM currently has a PEG ratio of 1.55. 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 was holding an average PEG ratio of 3.16 at yesterday's closing price.

The Wireless Equipment industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 207, putting it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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