Qualcomm (QCOM) reported Fiscal 2021 third-quarter financial results that showed strong improvements from a year ago and beat consensus estimates. The company went on to issue a bullish forecast for the fiscal fourth quarter. Qualcomm gained 1.07% on Wednesday to close at $142.44 and was trading around 3% higher in pre-market trading at the time of writing.
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Revenue increased 65% year-over-year to $8.1 billion and beat consensus estimates of $7.55 billion. Adjusted EPS of $1.92 increased 123% year-over-year and topped consensus estimates of 1.67. Qualcomm explained that both revenue and EPS exceeded the high end of its internal guidance. (See Qualcomm stock charts on TipRanks).
“Our solutions are fueling the connected intelligent edge that is enabling the cloud economy, and we are seeing unprecedented demand for our technologies as the pace of digital transformation accelerates,” said Qualcomm CEO Cristiano Amon.
The company returned $1.4 billion to shareholders during Q3. The amount consisted of $767 million in cash dividend distributions and $630 million in stock repurchases.
For Q4, Qualcomm issued revenue guidance of $8.4 billion – $9.2 billion and expects adjusted EPS in the range of $2.15 – $2.35. Consensus estimates call for revenue of $8.5 billion and EPS of $2.04.
Yesterday, Canaccord analyst Michael Walkley reiterated a Buy rating on Qualcomm stock and raised the price target to $195 from $188. Walkley’s new price target suggests 36.90% upside potential. The analyst sees Qualcomm benefitting from the 5G transition and IoT trends.
“With global smartphone demand recovering and supply constraints gradually easing, Qualcomm is well positioned to benefit from the long-term 5G investment cycle, and we anticipate strong earnings through F2022 and beyond as 5G smartphones ramp,” commented Walkley.
Consensus among analysts is a Strong Buy based on 7 Buys and 1 Hold. The average Qualcomm price target of $181.86 implies 27.67% upside potential to current levels.
QCOM scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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