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

Zacks Equity Research
·3-min read

Qualcomm (QCOM) closed the most recent trading day at $133.01, moving +0.96% from the previous trading session. This change outpaced the S&P 500's 0.95% gain on the day.

Prior to today's trading, shares of the chipmaker had lost 8.8% over the past month. This has lagged the Computer and Technology sector's gain of 0.28% and the S&P 500's loss of 1.87% in that time.

Investors will be hoping for strength from QCOM as it approaches its next earnings release. The company is expected to report EPS of $2.26, up 55.86% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.88 billion, up 6.39% from the year-ago period.

QCOM's full-year Zacks Consensus Estimates are calling for earnings of $8.25 per share and revenue of $33.03 billion. These results would represent year-over-year changes of +96.9% and +40.37%, respectively.

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Any recent changes to analyst estimates for QCOM should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.06% higher within the past month. QCOM is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, QCOM currently has a Forward P/E ratio of 15.98. Its industry sports an average Forward P/E of 21.1, so we one might conclude that QCOM is trading at a discount comparatively.

Also, we should mention that QCOM has a PEG ratio of 0.82. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Wireless Equipment industry currently had an average PEG ratio of 3.93 as of yesterday's close.

The Wireless Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 78, which puts it in the top 31% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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