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Is Qualcomm Stock a Smart Buy Before Q1 Earnings Release?
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Qualcomm Incorporated (QCOM - Free Report) is scheduled to report first-quarter fiscal 2025 earnings on Feb. 5, 2025. The Zacks Consensus Estimate for revenues and earnings is pegged at $10.92 billion and $2.93 per share, respectively. Earnings estimates for QCOM have improved from $11.17 per share to $11.21 for fiscal 2025 and from $12.23 per share to $12.32 for fiscal 2026 over the past 30 days.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
QCOM Estimate Trend
Image Source: Zacks Investment Research
Earnings Surprise History
The chip manufacturer delivered a four-quarter earnings surprise of 7.6%, on average, beating estimates on each occasion. In the last reported quarter, the company pulled off an earnings surprise of 5.1%.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model predicts an earnings beat for Qualcomm for the fiscal first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is perfectly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
With the accelerated rollout of 5G technology, Qualcomm is benefiting from investments toward building a licensing program in mobile. The company is well-positioned to meet its long-term revenue targets driven by solid 5G traction, greater visibility and a diversified revenue stream. The company intends to harness artificial intelligence (AI) to meet increased demands for essential products and services that are the building blocks of digital transformation in a cloud economy. Qualcomm envisions solid growth opportunities within the mobile space, driven by the strength of its Snapdragon portfolio.
During the fiscal first quarter, Qualcomm completed an end-to-end trial of SMS send and receipt over a Geostationary Equatorial Orbit (GEO) satellite in collaboration with Deutsche Telekom (DTEGY - Free Report) and Skylo, marking a significant milestone in the development of satellite communication services. This marks the first time in Europe that an operator’s terrestrial mobile network has been integrated with a satellite network to enable texting, following the 3GPP Release 17 specifications for Direct-to-Handset (D2H) connectivity. The device was equipped with QUALCOMM’s cutting-edge Snapdragon X-80 5G Modem-RF System, which provided integrated NB-NTN satellite connectivity based on 3GPP Release 17 standards. This innovation will likely allow customers in remote or underserved regions to send and receive text messages globally through satellite connectivity.
In the fiscal first quarter, Qualcomm unveiled the Qualcomm Artificial Intelligence (AI) Program for Innovators 2025 in the Asia-Pacific region (APAC), a new initiative to empower developers and startups in Japan, Singapore and South Korea. The program focuses on creating cutting-edge on-device AI solutions across mobile, compute and Internet of Things (IoT) sectors. This initiative underscores Qualcomm’s dedication to advancing the AI ecosystem in the APAC and empowering innovators to redefine industries through on-device AI solutions. These initiatives are likely to be reflected in the upcoming results.
Price Performance
Over the past year, Qualcomm has gained 20.1% compared with the industry’s growth of 33.3%, lagging peers like Hewlett Packard Enterprise Company (HPE - Free Report) and Broadcom Inc. (AVGO - Free Report) .
One-Year QCOM Stock Price Performance
Image Source: Zacks Investment Research
Key Valuation Metric
From a valuation standpoint, Qualcomm appears to be relatively cheaper compared to the industry and below its mean. Going by the price/earnings ratio, the company shares currently trade at 14.92 forward earnings, lower than 21.53 for the industry and the stock’s mean of 17.35.
Image Source: Zacks Investment Research
Investment Considerations
Qualcomm is one of the largest manufacturers of wireless chipsets based on baseband technology. The company is focusing on retaining its leadership in 5G, chipset market and mobile connectivity with several technological achievements and innovative product launches. It is likely to help users experience a seamless transition to superfast 5G networks, delivering low-power resilient multi-gigabit connectivity with unprecedented range and Qualcomm's best-in-class security. This, in turn, offers the flexibility and scalability needed for broad and fast 5G adoption through accelerated commercialization by OEMs.
The company is reportedly the only chipset vendor with 5G system-level solutions spanning both sub-6 and millimeter wave bands and one of the largest RF (radio frequency) front-end suppliers with design wins across all premium-tier smartphone customers. Leveraging the technology roadmap for a focused approach to innovation, it aims to connect millions of devices to the ‘connected intelligent edge.’
In addition, solid growth opportunities within the mobile space led by innovations in the Snapdragon portfolio for premium-tier Android handsets and a firmer footing in the emerging market of driver-assistance technology with the Snapdragon Ride Advanced Driver Assistance Systems portfolio are tailwinds.
End Note
With solid fundamentals and healthy revenue-generating potential driven by robust demand trends, Qualcomm appears to be a solid investment proposition. It also looks cheaper relative to its valuation metrics. Further, a strong emphasis on quality, diligent execution of operational plans and continuous portfolio enhancements are driving more value for customers. With improving earnings estimates, the stock is witnessing a positive investor perception.
Riding on a robust earnings surprise history and favorable Zacks Rank, it appears primed to record solid quarterly results in the ensuing earnings. Hence, investors are likely to profit if they bet on this high-flying stock now.
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Is Qualcomm Stock a Smart Buy Before Q1 Earnings Release?
Qualcomm Incorporated (QCOM - Free Report) is scheduled to report first-quarter fiscal 2025 earnings on Feb. 5, 2025. The Zacks Consensus Estimate for revenues and earnings is pegged at $10.92 billion and $2.93 per share, respectively. Earnings estimates for QCOM have improved from $11.17 per share to $11.21 for fiscal 2025 and from $12.23 per share to $12.32 for fiscal 2026 over the past 30 days.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
QCOM Estimate Trend
Image Source: Zacks Investment Research
Earnings Surprise History
The chip manufacturer delivered a four-quarter earnings surprise of 7.6%, on average, beating estimates on each occasion. In the last reported quarter, the company pulled off an earnings surprise of 5.1%.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model predicts an earnings beat for Qualcomm for the fiscal first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is perfectly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Qualcomm currently has an ESP of +3.34% with a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping the Upcoming Results
With the accelerated rollout of 5G technology, Qualcomm is benefiting from investments toward building a licensing program in mobile. The company is well-positioned to meet its long-term revenue targets driven by solid 5G traction, greater visibility and a diversified revenue stream. The company intends to harness artificial intelligence (AI) to meet increased demands for essential products and services that are the building blocks of digital transformation in a cloud economy. Qualcomm envisions solid growth opportunities within the mobile space, driven by the strength of its Snapdragon portfolio.
During the fiscal first quarter, Qualcomm completed an end-to-end trial of SMS send and receipt over a Geostationary Equatorial Orbit (GEO) satellite in collaboration with Deutsche Telekom (DTEGY - Free Report) and Skylo, marking a significant milestone in the development of satellite communication services. This marks the first time in Europe that an operator’s terrestrial mobile network has been integrated with a satellite network to enable texting, following the 3GPP Release 17 specifications for Direct-to-Handset (D2H) connectivity. The device was equipped with QUALCOMM’s cutting-edge Snapdragon X-80 5G Modem-RF System, which provided integrated NB-NTN satellite connectivity based on 3GPP Release 17 standards. This innovation will likely allow customers in remote or underserved regions to send and receive text messages globally through satellite connectivity.
In the fiscal first quarter, Qualcomm unveiled the Qualcomm Artificial Intelligence (AI) Program for Innovators 2025 in the Asia-Pacific region (APAC), a new initiative to empower developers and startups in Japan, Singapore and South Korea. The program focuses on creating cutting-edge on-device AI solutions across mobile, compute and Internet of Things (IoT) sectors. This initiative underscores Qualcomm’s dedication to advancing the AI ecosystem in the APAC and empowering innovators to redefine industries through on-device AI solutions. These initiatives are likely to be reflected in the upcoming results.
Price Performance
Over the past year, Qualcomm has gained 20.1% compared with the industry’s growth of 33.3%, lagging peers like Hewlett Packard Enterprise Company (HPE - Free Report) and Broadcom Inc. (AVGO - Free Report) .
One-Year QCOM Stock Price Performance
Image Source: Zacks Investment Research
Key Valuation Metric
From a valuation standpoint, Qualcomm appears to be relatively cheaper compared to the industry and below its mean. Going by the price/earnings ratio, the company shares currently trade at 14.92 forward earnings, lower than 21.53 for the industry and the stock’s mean of 17.35.
Image Source: Zacks Investment Research
Investment Considerations
Qualcomm is one of the largest manufacturers of wireless chipsets based on baseband technology. The company is focusing on retaining its leadership in 5G, chipset market and mobile connectivity with several technological achievements and innovative product launches. It is likely to help users experience a seamless transition to superfast 5G networks, delivering low-power resilient multi-gigabit connectivity with unprecedented range and Qualcomm's best-in-class security. This, in turn, offers the flexibility and scalability needed for broad and fast 5G adoption through accelerated commercialization by OEMs.
The company is reportedly the only chipset vendor with 5G system-level solutions spanning both sub-6 and millimeter wave bands and one of the largest RF (radio frequency) front-end suppliers with design wins across all premium-tier smartphone customers. Leveraging the technology roadmap for a focused approach to innovation, it aims to connect millions of devices to the ‘connected intelligent edge.’
In addition, solid growth opportunities within the mobile space led by innovations in the Snapdragon portfolio for premium-tier Android handsets and a firmer footing in the emerging market of driver-assistance technology with the Snapdragon Ride Advanced Driver Assistance Systems portfolio are tailwinds.
End Note
With solid fundamentals and healthy revenue-generating potential driven by robust demand trends, Qualcomm appears to be a solid investment proposition. It also looks cheaper relative to its valuation metrics. Further, a strong emphasis on quality, diligent execution of operational plans and continuous portfolio enhancements are driving more value for customers. With improving earnings estimates, the stock is witnessing a positive investor perception.
Riding on a robust earnings surprise history and favorable Zacks Rank, it appears primed to record solid quarterly results in the ensuing earnings. Hence, investors are likely to profit if they bet on this high-flying stock now.