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

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Qualcomm (QCOM - Free Report) closed at $122.04 in the latest trading session, marking a +1.46% move from the prior day. The stock outpaced the S&P 500's daily loss of 1.56%. At the same time, the Dow lost 1.81%, and the tech-heavy Nasdaq lost 4.66%.

Heading into today, shares of the chipmaker had gained 7.3% over the past month, outpacing the Computer and Technology sector's gain of 3.96% and the S&P 500's gain of 3.82% in that time.

Wall Street will be looking for positivity from Qualcomm as it approaches its next earnings report date. In that report, analysts expect Qualcomm to post earnings of $2.35 per share. This would mark a year-over-year decline of 27.24%. Our most recent consensus estimate is calling for quarterly revenue of $9.59 billion, down 10.41% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $10.14 per share and revenue of $39.94 billion, which would represent changes of -19.07% and -9.65%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Qualcomm. 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.

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, 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 has moved 1.16% lower. Qualcomm currently has a Zacks Rank of #4 (Sell).

Digging into valuation, Qualcomm currently has a Forward P/E ratio of 11.87. For comparison, its industry has an average Forward P/E of 14.56, which means Qualcomm is trading at a discount to the group.

Investors should also note that QCOM has a PEG ratio of 0.76 right now. 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. Wireless Equipment stocks are, on average, holding a PEG ratio of 1.68 based on yesterday's closing prices.

The Wireless Equipment industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 146, putting it in the bottom 43% 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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