Qualcomm (QCOM) Suffers Bigger Drop Than Broad Market: Key Takeaways

At the last market close, Qualcomm (QCOM) reached $150.40, representing a move of -1.73% compared to the previous day. The stock’s performance lagged the S&P 500’s daily loss of 0.09%. Meanwhile, the Dow rose 0.04% and the technology-focused Nasdaq fell 0.1%.

Year-to-date, shares of the chipmaker had lost 0.79% over the past month, lagging the Computer and Technology sector’s gain of 3.04% and the S&P 500’s loss of 0.29% in that time.

The investing community will be closely watching Qualcomm’s performance in its upcoming earnings report. The company is expected to report earnings per share of $2.92, up 6.18% from the corresponding quarter last year. At the same time, our most recent consensus estimate is calling for revenue of $10.89 billion, up 9.61% from the corresponding quarter last year.

QCOM’s full-year Zacks Consensus Estimates are calling for earnings of $11.14 per share and revenue of $42.19 billion. These results would represent year-over-year changes of +9% and +8.29%, respectively.

Investors should also note any recent changes to analyst estimates for Qualcomm. These recent adjustments often reflect the changing dynamics of short-term business patterns. As a result, upward estimate revisions reflect analysts’ positive view on the company’s operations and ability to generate profits.

Our research shows that these estimate revisions are directly related to upcoming stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable valuation model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has a remarkable track record of outperformance as verified by third-party audits, with stocks rated #1 having an average generate an annual return of +25%. since 1988. Over the last 30 days, our consensus EPS forecast has increased by 0.45%. Qualcomm is currently a Zacks Rank #2 (Buy).

In terms of valuation, Qualcomm is currently trading at a Forward P/E ratio of 13.73. This suggests a discount compared to the industry’s Forward P/E ratio of 16.09.

Investors should also note that QCOM currently has a PEG ratio of 2.09. Similar to the widely accepted P/E ratio, the PEG ratio also takes into account the company’s forecast earnings growth. The QCOM industry had an average PEG ratio of 3.35 as of yesterday’s close.

The wireless devices industry is part of the computer and technology sector. Currently, this industry has a Zacks Industry Rank of 49, putting it in the top 20% of over 250 industries.

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