Qualcomm’s shares (NASDAQ:QCOM) took a sharp 9% dive at the time of writing following a mix of third-quarter results and lackluster future guidance. This stirred up critical responses from Wall Street, particularly from Deutsche Bank’s analyst Ross Seymore. He downgraded the company’s shares and chopped his price target, expressing concern over “soft commentary” and structural rather than cyclical challenges. Seymore’s caution centered on the company’s continued struggles in its Handset segment and questioned Qualcomm’s growth potential, considering competitors like Apple and Huawei might replace Qualcomm with in-house modems.
The third-quarter numbers told a gloomy tale, with adjusted earnings of $1.87 per share on $8.44B in revenue. The results were somewhat in line with Wall Street’s expectations, but what really raised eyebrows was Qualcomm’s outlook for the fourth quarter. The company is projecting adjusted earnings of $1.80 to $2 per share and revenue of $8.1B to $8.9B, both falling short of Wall Street’s predictions. Analyst Gary Mobley of Wells Fargo echoed the general sentiment, finding little to praise and highlighting the company’s relative underperformance in a risk-on market.
Is Qualcomm a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on QCOM stock based on 14 Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic above. Nevertheless, the average price target of $137.16 per share implies 17.75% upside potential.
