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Qualcomm (QCOM) Registers a Bigger Fall Than the Market: Important Facts to Note

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In the latest trading session, Qualcomm (QCOM - Free Report) closed at $180.19, marking a -1.24% move from the previous day. This change lagged the S&P 500's 0.34% loss on the day. At the same time, the Dow lost 0.94%, and the tech-heavy Nasdaq gained 0.16%.

Prior to today's trading, shares of the chipmaker had gained 3.66% outpaced the Computer and Technology sector's loss of 1% and the S&P 500's gain of 1.19%.

The investment community will be closely monitoring the performance of Qualcomm in its forthcoming earnings report. The company's upcoming EPS is projected at $3.38, signifying a 0.88% drop compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $12.25 billion, reflecting a 4.99% rise from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $12.15 per share and a revenue of $45.69 billion, demonstrating changes of +1% and +3.52%, respectively, from the preceding year.

Any recent changes to analyst estimates for Qualcomm should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Qualcomm is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note Qualcomm's current valuation metrics, including its Forward P/E ratio of 15.01. Its industry sports an average Forward P/E of 34.87, so one might conclude that Qualcomm is trading at a discount comparatively.

It's also important to note that QCOM currently trades at a PEG ratio of 3.27. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Electronics - Semiconductors industry had an average PEG ratio of 1.98 as trading concluded yesterday.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 103, putting it in the top 43% 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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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