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

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Qualcomm (QCOM - Free Report) closed at $157.97 in the latest trading session, marking a -0.31% move from the prior day. This move lagged the S&P 500's daily gain of 0.51%. Elsewhere, the Dow gained 0.44%, while the tech-heavy Nasdaq added 0.1%.

Heading into today, shares of the chipmaker had lost 5.67% over the past month, lagging the Computer and Technology sector's gain of 4.34% and the S&P 500's gain of 5.51% in that time.

Wall Street will be looking for positivity from Qualcomm as it approaches its next earnings report date. The company is expected to report EPS of $2.91, up 53.16% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $10.59 billion, up 33.46% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $11.76 per share and revenue of $42.39 billion, which would represent changes of +37.7% and +26.3%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Qualcomm. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Qualcomm is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that Qualcomm has a Forward P/E ratio of 13.48 right now. For comparison, its industry has an average Forward P/E of 23.43, which means Qualcomm is trading at a discount to the group.

Meanwhile, QCOM's PEG ratio is currently 0.84. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Wireless Equipment stocks are, on average, holding a PEG ratio of 2.19 based on yesterday's closing prices.

The Wireless Equipment industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 113, putting it in the top 45% 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.

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


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