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Qualcomm (QCOM) Laps the Stock Market: Here's Why

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Qualcomm (QCOM - Free Report) ended the recent trading session at $168.85, demonstrating a +1.42% change from the preceding day's closing price. This change outpaced the S&P 500's 0.06% gain on the day. Elsewhere, the Dow saw an upswing of 0.17%, while the tech-heavy Nasdaq appreciated by 0.39%.

Shares of the chipmaker witnessed a gain of 5.86% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 8.78%, and outperforming the S&P 500's gain of 3.94%.

Analysts and investors alike will be keeping a close eye on the performance of Qualcomm in its upcoming earnings disclosure. The company is forecasted to report an EPS of $2.86, showcasing a 6.32% upward movement from the corresponding quarter of the prior year. Meanwhile, the latest consensus estimate predicts the revenue to be $10.77 billion, indicating a 5.16% increase compared to the same quarter of the previous year.

QCOM's full-year Zacks Consensus Estimates are calling for earnings of $11.89 per share and revenue of $43.78 billion. These results would represent year-over-year changes of +16.34% and 0%, respectively.

Investors should also take note of any recent adjustments to analyst estimates for Qualcomm. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Right now, Qualcomm possesses a Zacks Rank of #3 (Hold).

Looking at valuation, Qualcomm is presently trading at a Forward P/E ratio of 14.02. This denotes a discount relative to the industry average Forward P/E of 38.84.

Also, we should mention that QCOM has a PEG ratio of 1.97. 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. The Electronics - Semiconductors was holding an average PEG ratio of 2.02 at yesterday's closing price.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 178, this industry ranks in the bottom 28% of all industries, numbering over 250.

The Zacks Industry Rank is ordered 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.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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