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Qualcomm (QCOM) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Qualcomm (QCOM) closed at $74.97, marking a +0.83% move from the previous day. This move outpaced the S&P 500's daily gain of 0.64%. Elsewhere, the Dow gained 0.57%, while the tech-heavy Nasdaq added 0.6%.

Prior to today's trading, shares of the chipmaker had lost 6.95% over the past month. This has lagged the Computer and Technology sector's loss of 1.05% and the S&P 500's loss of 1.87% in that time.

QCOM will be looking to display strength as it nears its next earnings release, which 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%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.72 billion, down 18.7% from the year-ago period.

Investors should also note any recent changes to analyst estimates for QCOM. These recent revisions tend to reflect the evolving nature of short-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. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. QCOM is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, QCOM currently has a Forward P/E ratio of 18.48. This valuation marks a discount compared to its industry's average Forward P/E of 21.88.

We can also see that QCOM currently has a PEG ratio of 1.45. 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. The Wireless Equipment industry currently had an average PEG ratio of 2.73 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 102, which puts it in the top 40% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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