Qualcomm (QCOM) AI Stock Analysis

• Market Cap: $153.51B
• Dividend Yield: 2.51%
• Average Volume (3M): 9.95M
• Price to Earnings (P/E): 14.9
• Beta (1Y): 1.70
• Revenue Growth: 16.15%
• EPS Growth: 32.28%
• Country: US
• Employees: 49,000
• Sector: Technology
• Sector Strength: 69
• Industry: Semiconductors
• EPS (TTM): 9.82
• Shares Outstanding: 1,098,000,000
• 10 Day Avg. Volume: 9,264,568
• 30 Day Avg. Volume: 9,950,961
• PEG Ratio: 0.46
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.15
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 8.07
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $185.67
• Price Target Upside: 32.80% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 21

Qualcomm's overall score is driven by its strong financial performance and positive earnings call, reflecting substantial growth potential in automotive and IoT sectors. While the stock's technical indicators suggest bearish momentum, its undervalued P/E ratio and solid dividend yield provide a cushion for investors. Key risks include uncertainties in the global trade environment and flat licensing revenues, which may impact short-term performance.

Positive Factors

Financial Performance

Qualcomm's FQ225 results were solid, with outperformance in all segments including Handsets, Auto, and IoT.

Market Opportunities

Qualcomm is a beneficiary of the growing 5G opportunities in the premium handset, automotive, IoT, and edge networking segments.

Strategic Partnerships

Recently announced extension of Apple partnership to 2026 ensures earnings visibility for the handset segment.

Negative Factors

Competitive Pressure

Mediatek, the largest Chinese competitor to Qualcomm, continues to move up market into premium tier devices which could lead to share loss for Qualcomm.

Macroeconomic Risks

There is current uncertainty around tariffs and macroeconomic conditions, which management acknowledges.

Market Expectations

Results seemed to be below buy-side expectations, leading to a stock sell-off in the aftermarket.

Qualcomm Business Overview & Revenue Model

Company Description

QUALCOMM Incorporated engages in the development and commercialization of foundational technologies for the wireless industry worldwide. The company operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI). The QCT segment develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies for use in wireless voice and data communications, networking, application processing, multimedia, and global positioning system products. The QTL segment grants licenses or provides rights to use portions of its intellectual property portfolio, which include various patent rights useful in the manufacture and sale of wireless products comprising products implementing CDMA2000, WCDMA,LTE and/or OFDMA-based 5G standards and their derivatives. The QSI segment invests in early-stage companies in various industries, including 5G, artificial intelligence, automotive, consumer, enterprise, cloud, and IoT, and investment for supporting the design and introduction of new products and services for voice and data communications, new industries, and applications. It also provides development, and other services and related products to the United States government agencies and their contractors. QUALCOMM Incorporated was incorpotared in 1985 and is headquartered in San Diego, California.

How the Company Makes Money

Qualcomm makes money primarily through two main segments: Qualcomm CDMA Technologies (QCT) and Qualcomm Technology Licensing (QTL). QCT is the largest revenue generator, involving the sales of semiconductor products and system software for mobile devices, automotive applications, and IoT. This includes processors, modems, RF systems, and connectivity products. QTL generates revenue by licensing Qualcomm's extensive portfolio of patents to manufacturers of wireless products. These licensing agreements allow customers to use Qualcomm's patented technology in their devices in exchange for royalties. Significant partnerships with major mobile device manufacturers and network operators globally also contribute to Qualcomm's earnings by integrating its technologies into their products, thereby driving demand for its semiconductor and licensing solutions.

Qualcomm Financial Statement Overview

Summary

Qualcomm exhibits robust financial health characterized by strong profitability, efficient cash flow management, and a balanced capital structure. The company shows consistent revenue growth and profitability, with efficient leverage and a strong equity base. These metrics highlight Qualcomm's solid position in the semiconductor industry, with well-managed financial operations and growth potential.

Income Statement

Qualcomm demonstrates strong profitability with a gross profit margin of 55.7% and a net profit margin of 26.1% for TTM (Trailing-Twelve-Months). The company shows a robust revenue growth rate of 8.5% from the previous year. EBIT and EBITDA margins are healthy at 27.3% and 31.4%, respectively, indicating efficient operational management. The income statement reflects solid financial performance, driven by consistent revenue growth and strong profitability metrics.

Balance Sheet

Qualcomm's balance sheet is stable with a debt-to-equity ratio of 0.53, reflecting moderate leverage. The return on equity (ROE) for TTM is 39.8%, indicating effective use of equity to generate profits. The equity ratio stands at 50.1%, suggesting a balanced asset financing structure. Despite moderate debt levels, the company's strong equity position and high ROE underscore its financial health.

Cash Flow

The cash flow analysis reveals a positive trajectory with a free cash flow growth rate of 4.9%. The operating cash flow to net income ratio is 1.16, and the free cash flow to net income ratio is 1.06, indicating strong cash generation relative to earnings. Qualcomm's ability to generate cash efficiently supports its financial stability and growth prospects.

Breakdown
Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
38.96B	35.82B	44.20B	33.57B	23.53B
	Gross Profit
21.90B	19.95B	25.57B	19.30B	14.28B
	EBIT
10.07B	7.79B	15.86B	9.79B	6.25B
	EBITDA
12.74B	10.46B	16.56B	11.37B	7.62B
	Net Income Common Stockholders
10.14B	7.23B	12.94B	9.04B	5.20B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
13.30B	11.32B	6.38B	12.41B	11.21B
	Total Assets
55.15B	51.04B	49.01B	41.24B	35.59B
	Total Debt
14.63B	15.40B	15.48B	15.74B	15.73B
	Net Debt
6.79B	6.95B	12.71B	8.63B	9.02B
	Total Liabilities
28.88B	29.46B	31.00B	31.29B	29.52B
	Stockholders Equity
26.27B	21.58B	18.01B	9.95B	6.08B
Cash Flow		Free Cash Flow
11.16B	9.85B	6.83B	8.65B	4.41B
	Operating Cash Flow
12.20B	11.30B	9.10B	10.54B	5.81B
	Investing Cash Flow
-3.62B	762.00M	-5.80B	-3.36B	-5.26B
	Financing Cash Flow
-9.27B	-6.66B	-7.20B	-6.80B	-5.71B

Qualcomm Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 139.81
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QCOM, the sentiment is Negative. The current price of 139.81 is above the 20-day moving average (MA) of 138.92, below the 50-day MA of 149.24, and below the 200-day MA of 161.35, indicating a neutral trend. The MACD of -1.76 indicates Negative momentum. The RSI at 45.66 is Neutral, neither overbought nor oversold. The STOCH value of 46.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for QCOM.

Qualcomm Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QCOM	76 Outperform	$153.51B	14.94	42.21%	2.51%	16.15%	32.28%
NXPI	74 Outperform	$47.53B	20.29	26.02%	2.23%	-7.21%	-15.29%
AMD	73 Outperform	$159.76B	98.48	2.89%	―	13.69%	91.75%
TXN	72 Outperform	$143.77B	29.99	29.04%	3.40%	-4.48%	-17.82%
ADI	69 Neutral	$96.09B	61.78	4.43%	1.93%	-19.28%	-44.00%
Sector *	60 Neutral	$10.95B	10.52	-7.07%	3.00%	7.30%	-12.04%
INTC	45 Neutral	$89.94B	―	-18.66%	2.50%	-3.97%	-562.40%

Qualcomm Corporate Events

Qualcomm Elects New Director and Audit Committee Member

Marie Myers, currently the Executive Vice President and Chief Financial Officer of Hewlett Packard Enterprise Company, has been elected to the Board of Directors at QUALCOMM Incorporated, with her term ending at the next annual stockholders’ meeting. She will also serve on the Audit Committee. Myers’ appointment is based on her qualifications alone, with no reported conflicts of interest. As part of her compensation under the Qualcomm 2024 Director Compensation Plan, she received 677 deferred stock units.