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What Makes Qualcomm (QCOM) a Promising Investment Option?
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Shares of Qualcomm Incorporated (QCOM - Free Report) have surged 40.1% in the past year, making it one of the best performers in the Zacks Wireless Equipment industry. With healthy fundamentals, this Zacks Rank #2 (Buy) stock appears to be a solid investment option for investors in the long run, further corroborating the fact that the momentum is not ‘a flash in the pan’. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growth Drivers
Qualcomm is one of the largest manufacturers of wireless chipset based on baseband technology. The company is focusing to retain its leadership in 5G, chipset market and mobile connectivity with several technological achievements and innovative product launches. Qualcomm has redefined the computing and mobile ecosystem across the globe with the launch of QCA6390 Connectivity SoC product. This game-changing and arguably the most advanced integrated offering from Qualcomm is likely to deliver path-breaking performance in the 5G era and provide it a competitive advantage against rivals.
Built on indigenous technologies, the QCA6390 is designed to meet the growing need for faster connectivity options and data speed. Supporting all the feature suites of both Wi-Fi 6 and Bluetooth 5.1, it offers faster, more secure and robust Wi-Fi experiences and enhanced Bluetooth capabilities. These include ultra-high-definition voice and low-latency gaming over wireless headphones, earbuds and speakers. The QCA6390 sets a new industry standard with the world's first announced 14nm integrated SoC that boasts extended features and cutting-edge design. It is likely to help users experience seamless transition to super-fast 5G networks, delivering low-power resilient multi-gigabit connectivity with unprecedented range and Qualcomm’s best-in-class security. This, in turn, would further offer the flexibility and scalability needed for broad and fast 5G adoption through accelerated commercialization by OEMs.
The company has been primarily focusing on developing premium category Snapdragon 8 series chipsets that reportedly delivered speeds of up to 7 gigabits per second with a more powerful X55 5G modem. These chips are mostly found in high-end mobiles and smartphones, which put them beyond the reach of commoners. At the same time, Qualcomm is also seeking to expand its product portfolio and develop mobile phone chips for the masses. The strategic move is intended to drive higher sales and achieve economies of scale through mass production. In particular, Qualcomm is mulling to add 5G capabilities to its cheaper chipset versions of Snapdragon 6 and 7 series.
For calendar 2020, Qualcomm estimates sales of 1.75 billion to 1.85 billion units, up approximately 3% at the midpoint with 175 million to 225 million 5G handset units. The company anticipates witnessing two inflection points in fiscal 2020. The first inflection point realized during the fiscal first quarter is likely to continue in the first half of fiscal 2020 with continued strength and acceleration of 5G demand. The next inflection point is anticipated to be realized in the fiscal fourth quarter with the launch of additional 5G flagship handsets and is likely to extend into fiscal 2021.
Performance & Trend in Earnings Estimate Revisions
With more than 150 5G design wins to date, Qualcomm is reportedly the only chipset vendor with 5G system level solutions spanning both sub-6, gigahertz and millimeter wave bands. The stock has long-term earnings growth expectation of 19.5%. It delivered positive earnings surprise of 10%, on average, in the trailing four quarters, beating estimates on each occasion. Earnings estimates for the current fiscal have moved up 4.7% to $4.21 per share since August 2019, while that for the next fiscal is up 13.65% over the past year to $6.18 per share.
What Does RSI Indicate?
RSI or ‘Relative Strength Index’ is a popular technical indicator. It compares average of gains in days that closed up to the average of losses in days that closed down. Readings above 70 suggest an asset is overvalued, while that below 30 indicates undervalued conditions.
Qualcomm has an RSI reading of 27.75, which suggests it is now in the undervalued territory, making it a solid investment candidate.
Other Key Picks
Other top-ranked stocks in the industry include Motorola Solutions, Inc. (MSI - Free Report) , PCTEL, Inc. and Viasat Inc. (VSAT - Free Report) , each carrying a Zacks Rank #2.
Motorola has long-term earnings growth expectation of 8.5%. It delivered positive earnings surprise of 6.6%, on average, in the trailing four quarters, beating estimates on each occasion.
PCTEL surpassed earnings estimates on each occasion in the trailing four quarters, the positive surprise being 150.6%, on average.
Viasat delivered positive earnings surprise of 402%, on average, in the trailing four quarters, beating estimates on each occasion.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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What Makes Qualcomm (QCOM) a Promising Investment Option?
Shares of Qualcomm Incorporated (QCOM - Free Report) have surged 40.1% in the past year, making it one of the best performers in the Zacks Wireless Equipment industry. With healthy fundamentals, this Zacks Rank #2 (Buy) stock appears to be a solid investment option for investors in the long run, further corroborating the fact that the momentum is not ‘a flash in the pan’. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growth Drivers
Qualcomm is one of the largest manufacturers of wireless chipset based on baseband technology. The company is focusing to retain its leadership in 5G, chipset market and mobile connectivity with several technological achievements and innovative product launches. Qualcomm has redefined the computing and mobile ecosystem across the globe with the launch of QCA6390 Connectivity SoC product. This game-changing and arguably the most advanced integrated offering from Qualcomm is likely to deliver path-breaking performance in the 5G era and provide it a competitive advantage against rivals.
Built on indigenous technologies, the QCA6390 is designed to meet the growing need for faster connectivity options and data speed. Supporting all the feature suites of both Wi-Fi 6 and Bluetooth 5.1, it offers faster, more secure and robust Wi-Fi experiences and enhanced Bluetooth capabilities. These include ultra-high-definition voice and low-latency gaming over wireless headphones, earbuds and speakers. The QCA6390 sets a new industry standard with the world's first announced 14nm integrated SoC that boasts extended features and cutting-edge design. It is likely to help users experience seamless transition to super-fast 5G networks, delivering low-power resilient multi-gigabit connectivity with unprecedented range and Qualcomm’s best-in-class security. This, in turn, would further offer the flexibility and scalability needed for broad and fast 5G adoption through accelerated commercialization by OEMs.
The company has been primarily focusing on developing premium category Snapdragon 8 series chipsets that reportedly delivered speeds of up to 7 gigabits per second with a more powerful X55 5G modem. These chips are mostly found in high-end mobiles and smartphones, which put them beyond the reach of commoners. At the same time, Qualcomm is also seeking to expand its product portfolio and develop mobile phone chips for the masses. The strategic move is intended to drive higher sales and achieve economies of scale through mass production. In particular, Qualcomm is mulling to add 5G capabilities to its cheaper chipset versions of Snapdragon 6 and 7 series.
For calendar 2020, Qualcomm estimates sales of 1.75 billion to 1.85 billion units, up approximately 3% at the midpoint with 175 million to 225 million 5G handset units. The company anticipates witnessing two inflection points in fiscal 2020. The first inflection point realized during the fiscal first quarter is likely to continue in the first half of fiscal 2020 with continued strength and acceleration of 5G demand. The next inflection point is anticipated to be realized in the fiscal fourth quarter with the launch of additional 5G flagship handsets and is likely to extend into fiscal 2021.
Performance & Trend in Earnings Estimate Revisions
With more than 150 5G design wins to date, Qualcomm is reportedly the only chipset vendor with 5G system level solutions spanning both sub-6, gigahertz and millimeter wave bands. The stock has long-term earnings growth expectation of 19.5%. It delivered positive earnings surprise of 10%, on average, in the trailing four quarters, beating estimates on each occasion. Earnings estimates for the current fiscal have moved up 4.7% to $4.21 per share since August 2019, while that for the next fiscal is up 13.65% over the past year to $6.18 per share.
What Does RSI Indicate?
RSI or ‘Relative Strength Index’ is a popular technical indicator. It compares average of gains in days that closed up to the average of losses in days that closed down. Readings above 70 suggest an asset is overvalued, while that below 30 indicates undervalued conditions.
Qualcomm has an RSI reading of 27.75, which suggests it is now in the undervalued territory, making it a solid investment candidate.
Other Key Picks
Other top-ranked stocks in the industry include Motorola Solutions, Inc. (MSI - Free Report) , PCTEL, Inc. and Viasat Inc. (VSAT - Free Report) , each carrying a Zacks Rank #2.
Motorola has long-term earnings growth expectation of 8.5%. It delivered positive earnings surprise of 6.6%, on average, in the trailing four quarters, beating estimates on each occasion.
PCTEL surpassed earnings estimates on each occasion in the trailing four quarters, the positive surprise being 150.6%, on average.
Viasat delivered positive earnings surprise of 402%, on average, in the trailing four quarters, beating estimates on each occasion.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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