Qualcomm (QCOM) sinks more than broader markets: what you need to know

Qualcomm (QCOM) sinks more than broader markets: what you need to know


In the last trading session, Qualcomm (QCOM) closed at $124.98, which represents a -2% move from the previous day. This change lagged behind the S&P 500’s 1.13% loss on the day. Elsewhere, the Dow lost 0.56%, while the tech-heavy Nasdaq added 0.03%.

Going into today, the chipmaker’s shares had lost 14.14% in the past month. In that same time, the Information & Technology sector lost 12.18%, while the S&P 500 lost 7.59%.

Qualcomm will be looking to show strength as it gets closer to its next earnings release. On that day, Qualcomm is projected to report earnings of $3.15 per share, which would represent year-over-year growth of 23.53%. Meanwhile, our latest consensus estimate calls for revenue of $11.38 billion, up 21.91% from the prior year quarter.

Looking at the full year, our Zacks consensus estimates suggest that analysts expect earnings of $12.47 per share and revenue of $44.17 billion. These totals would mark changes of +46.02% and +31.58%, respectively, compared to last year.

It’s also important to note recent changes in analyst estimates for Qualcomm. These recent revisions tend to reflect the evolving nature of short-term trading trends. As such, the positive revisions to estimates reflect analysts’ optimism about the company’s business and profitability.

Research indicates that these forecast revisions are directly related to short-term stock price momentum. To benefit from this, we have developed Zacks Rank, a proprietary model that takes these estimate changes into account and provides an actionable ranking system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank System has a proven and externally audited track record of outperformance, with the #1 stocks averaging +25 Annual % since 1988. The Zacks Consensus The EPS estimate remained stagnant in the last month. Qualcomm is currently a Zacks Rank #3 (Hold).

Digging deeper into the valuation, Qualcomm currently has a forward P/E ratio of 10.23. This represents a discount compared to its industry average forward P/E of 17.18.

Also, we should mention that QCOM has a PEG ratio of 0.65. The PEG ratio is similar to the widely used P/E ratio, but this metric also takes into account the company’s expected earnings growth rate. Wireless stocks have, on average, a PEG ratio of 1.87 based on yesterday’s closing prices.

The Wireless Equipment industry is part of the Computing and Technology sector. This group has a Zacks Industry Ranking of 60, putting it in the top 24% of 250+ industries.

The Zacks Industry Rating measures the strength of our industry groups by measuring the average Zacks rating of individual stocks within the groups. Our research shows that the top 50% ranked industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics and much more at Zacks.com.

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