Technology

Qualcomm (QCOM) Stock Sinks As Market Gains: What You Should Know

Qualcomm (QCOM) closed at $56.33 in the latest trading session, marking a -1.93% move from the prior day. This change lagged the S&P 500's daily gain of 0.35%. Elsewhere, the Dow gained 0.03%, while the tech-heavy Nasdaq added 0.7%.

Heading into today, shares of the chipmaker had gained 4.74% over the past month, lagging the Computer and Technology sector's gain of 6.69% and the S&P 500's gain of 5.14% 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 May 1, 2019. The company is expected to report EPS of $0.71, down 11.25% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.79 billion, down 8.86% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.87 per share and revenue of $20.35 billion, which would represent changes of +4.88% and -10.46%, respectively, from the prior year.

Any recent changes to analyst estimates for QCOM should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. QCOM is currently a Zacks Rank #3 (Hold).

Digging into valuation, QCOM currently has a Forward P/E ratio of 14.84. This represents a discount compared to its industry's average Forward P/E of 24.29.

We can also see that QCOM currently has a PEG ratio of 1.51. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Wireless Equipment was holding an average PEG ratio of 2.31 at yesterday's closing price.

The Wireless Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 65, which puts it in the top 26% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.