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Qualcomm (QCOM) Gains As Market Dips: What You Should Know

Zacks Equity Research

Qualcomm (QCOM) closed the most recent trading day at $75.76, moving +0.12% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.65%. At the same time, the Dow lost 0.42%, and the tech-heavy Nasdaq lost 0.46%.

Prior to today's trading, shares of the chipmaker had gained 5.16% over the past month. This has lagged the Computer and Technology sector's gain of 5.63% and outpaced the S&P 500's gain of 4.11% in that time.

Investors will be hoping for strength from QCOM as it approaches its next earnings release, which is expected to be July 31, 2019. On that day, QCOM is projected to report earnings of $0.76 per share, which would represent a year-over-year decline of 24.75%. Our most recent consensus estimate is calling for quarterly revenue of $5.11 billion, down 8.74% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.82 per share and revenue of $20.43 billion. These totals would mark changes of +3.52% and -10.1%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for QCOM. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.3% lower. QCOM is currently sporting a Zacks Rank of #4 (Sell).

Investors should also note QCOM's current valuation metrics, including its Forward P/E ratio of 19.82. This represents a discount compared to its industry's average Forward P/E of 25.07.

Meanwhile, QCOM's PEG ratio is currently 1.56. 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 2.98 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 52, putting it in the top 21% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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