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

Zacks Equity Research

In the latest trading session, Qualcomm (QCOM) closed at $92.97, marking a -1.66% move from the previous day. This move lagged the S&P 500's daily gain of 0.03%. Elsewhere, the Dow lost 0.03%, while the tech-heavy Nasdaq added 0.14%.

Coming into today, shares of the chipmaker had gained 6.5% in the past month. In that same time, the Computer and Technology sector gained 6.3%, while the S&P 500 gained 3.23%.

Investors will be hoping for strength from QCOM as it approaches its next earnings release, which 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, our latest consensus estimate is calling for revenue of $4.83 billion, down 0.35% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.12 per share and revenue of $21.88 billion, which would represent changes of +16.38% and -9.84%, 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, 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. Within the past 30 days, our consensus EPS projection remained stagnant. QCOM is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, QCOM currently has a Forward P/E ratio of 22.92. This valuation marks a discount compared to its industry's average Forward P/E of 27.03.

We can also see that QCOM currently has a PEG ratio of 1.64. 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. The Wireless Equipment industry currently had an average PEG ratio of 3.13 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 201, putting it in the bottom 22% 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.

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


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