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

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Qualcomm (QCOM - Free Report) closed at $56.65 in the latest trading session, marking a +1.94% move from the prior day. This change lagged the S&P 500's 2.3% gain on the day. Meanwhile, the Dow gained 2.5%, and the Nasdaq, a tech-heavy index, added 2.95%.

Prior to today's trading, shares of the chipmaker had lost 12.05% over the past month. This has lagged the Computer and Technology sector's loss of 1.65% and the S&P 500's gain of 1.21% in that time.

Wall Street will be looking for positivity from QCOM as it approaches its next earnings report date. This is expected to be January 30, 2019. The company is expected to report EPS of $1.06, up 8.16% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.91 billion, down 19.1% from the prior-year quarter.

QCOM's full-year Zacks Consensus Estimates are calling for earnings of $4.04 per share and revenue of $20.81 billion. These results would represent year-over-year changes of +9.49% and -8.44%, respectively.

Investors should also note any recent changes to analyst estimates for QCOM. These recent revisions tend to reflect the evolving nature of short-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. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 26.07% higher within the past month. QCOM is currently a Zacks Rank #1 (Strong Buy).

Valuation is also important, so investors should note that QCOM has a Forward P/E ratio of 13.76 right now. For comparison, its industry has an average Forward P/E of 19.78, which means QCOM is trading at a discount to the group.

Also, we should mention that QCOM has a PEG ratio of 1.2. 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 2.09 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 13, putting it in the top 5% 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.

To follow QCOM in the coming trading sessions, be sure to utilize Zacks.com.




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