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Qualcomm (QCOM) Gains But Lags Market: What You Should Know

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Qualcomm (QCOM - Free Report) closed the most recent trading day at $123.78, moving +0.08% from the previous trading session. This move lagged the S&P 500's daily gain of 0.76%. Meanwhile, the Dow gained 1.05%, and the Nasdaq, a tech-heavy index, lost 0.98%.

Heading into today, shares of the chipmaker had lost 10.68% over the past month, lagging the Computer and Technology sector's loss of 3.99% and the S&P 500's loss of 3.91% in that time.

Wall Street will be looking for positivity from Qualcomm as it approaches its next earnings report date. On that day, Qualcomm is projected to report earnings of $2.15 per share, which would represent a year-over-year decline of 33.02%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.05 billion, down 18.91% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.52 per share and revenue of $37.94 billion. These totals would mark changes of -24.02% and -14.17%, respectively, from last year.

Any recent changes to analyst estimates for Qualcomm should also be noted by investors. 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. 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. Over the past month, the Zacks Consensus EPS estimate has moved 5.78% lower. Qualcomm is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Qualcomm is holding a Forward P/E ratio of 12.99. For comparison, its industry has an average Forward P/E of 13.26, which means Qualcomm is trading at a discount to the group.

It is also worth noting that QCOM currently has a PEG ratio of 0.83. 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. QCOM's industry had an average PEG ratio of 2.46 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 159, which puts it in the bottom 37% 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.

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