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

Zacks Equity Research
Zoom Video Communications (ZM) closed the most recent trading day at $93.38, moving -1.9% from the previous trading session.

Qualcomm (QCOM) closed the most recent trading day at $66.59, moving +1.26% from the previous trading session. This change outpaced the S&P 500's 0.21% gain on the day. Meanwhile, the Dow gained 0.17%, and the Nasdaq, a tech-heavy index, added 0.27%.

Prior to today's trading, shares of the chipmaker had lost 23.86% over the past month. This has lagged the Computer and Technology sector's loss of 8.68% and the S&P 500's loss of 5.26% in that time.

Wall Street will be looking for positivity from QCOM as it approaches its next earnings report date. In that report, analysts expect QCOM to post earnings of $0.77 per share. This would mark a year-over-year decline of 23.76%. 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 $3.85 per share and revenue of $20.64 billion. These totals would mark changes of +4.34% and -9.2%, respectively, from last year.

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. 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. Over the past month, the Zacks Consensus EPS estimate has moved 5.57% higher. QCOM is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that QCOM has a Forward P/E ratio of 17.09 right now. Its industry sports an average Forward P/E of 22.82, so we one might conclude that QCOM is trading at a discount comparatively.

Investors should also note that QCOM has a PEG ratio of 1.25 right now. 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 2.69 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 13, putting it in the top 6% 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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