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

Zacks Equity Research
Apple (AAPL) closed at $205.21 in the latest trading session, marking a +0.94% move from the prior day.

Qualcomm (QCOM) closed at $71.80 in the latest trading session, marking a -0.22% move from the prior day. This move lagged the S&P 500's daily gain of 0.3%. Elsewhere, the Dow gained 0.15%, while the tech-heavy Nasdaq added 0.42%.

Coming into today, shares of the chipmaker had lost 7.45% in the past month. In that same time, the Computer and Technology sector gained 0.55%, while the S&P 500 gained 2.2%.

Investors will be hoping for strength from QCOM as it approaches its next earnings release. On that day, QCOM is projected to report earnings of $0.77 per share, which would represent 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.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.85 per share and revenue of $20.64 billion, which would represent changes of +4.34% and -9.2%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for QCOM. These revisions help to show the ever-changing nature of 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. 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 0.17% lower. QCOM is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, QCOM is currently trading at a Forward P/E ratio of 18.71. This represents a discount compared to its industry's average Forward P/E of 24.65.

It is also worth noting that QCOM currently has a PEG ratio of 1.37. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Wireless Equipment stocks are, on average, holding a PEG ratio of 3.01 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 15, which puts it in the top 6% 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.

To follow QCOM in the coming trading sessions, be sure to utilize Zacks.com.


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