Qualcomm (QCOM) AI Stock Analysis

• Market Cap: $173.83B
• Dividend Yield: 2.13%
• Average Volume (3M): 8.39M
• Price to Earnings (P/E): 16.8
• Beta (1Y): 1.79
• Revenue Growth: 12.13%
• EPS Growth: 36.17%
• Country: US
• Employees: 49,000
• Sector: Technology
• Sector Strength: 48
• Industry: Semiconductors and Equipment
• EPS (TTM): 9.36
• Shares Outstanding: 1,106,000,000
• 10 Day Avg. Volume: 9,075,610
• 30 Day Avg. Volume: 8,388,362
• PEG Ratio: 0.46
• Price to Book (P/B): N/A
• Price to Sales (P/S): 4.27
• Price to Cash Flow (P/CF): 9.50
• P/FCF Ratio: 10.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $200.16
• Price Target Upside: 29.59% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 21

Qualcomm's overall score is driven by strong financial performance and positive earnings call results, tempered by mixed technical analysis signals. The robust earnings and strategic expansions, particularly in automotive and IoT, highlight growth potential, while current technical indicators suggest caution in the near term.

Positive Factors

Financial Performance

Qualcomm delivered a very solid December quarter print, with record revenue of $11.7 billion, growing 17% annually and 13% sequentially, where results were ahead of the Street consensus by more than $750 million.

IoT Business Growth

Qualcomm saw strength from its IoT business, with annual revenue growing 36%, driven by new product launches of its leading-edge processors and on-device AI capability across its consumer, networking, and industrial end markets.

Negative Factors

Handset Revenue Concerns

The expected 10% decline in the company’s QCT handset revenues is primarily driven by seasonality and shipments to Apple.

Qualcomm Business Overview & Revenue Model

Company Description

Qualcomm Incorporated is a global leader in the development and commercialization of foundational technologies for the wireless industry. It operates primarily in the semiconductor and telecommunications sectors, providing products and services that enable wireless communications and connectivity. Qualcomm is renowned for its innovation in mobile technologies, including 5G, and it supplies integrated circuits and software to mobile device manufacturers worldwide. The company's technologies are also applied in automotive, IoT, and networking industries.

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's financial health is marked by strong profitability, stable balance sheet, and robust cash flow generation. High margins and efficient use of equity position it well for future growth, despite challenges reversing recent revenue declines.

Income Statement

Qualcomm's income statement reveals strong profitability with a gross profit margin of 56.0% and a net profit margin of 25.9% for TTM. The company also shows robust EBIT and EBITDA margins of 26.5% and 30.1%, respectively. Despite a decrease in total revenue compared to 2022, the recent TTM revenue of $40.7 billion indicates a recovery from the drop seen last year. Overall, Qualcomm demonstrates healthy margins but faces the challenge of reversing revenue decline.

Balance Sheet

The balance sheet displays a solid equity base with a debt-to-equity ratio of 0.54, indicating moderate leverage. The return on equity (ROE) is impressive at 39.3%, reflecting efficient use of equity. However, the equity ratio of 48.4% suggests a balanced but slightly leveraged position. Qualcomm's financial structure is stable, though there is room for improvement in reducing liabilities.

Cash Flow

Qualcomm's cash flow performance is strong, with a free cash flow growth rate of 14.1% in TTM, supported by a high operating cash flow to net income ratio of 1.31. The free cash flow to net income ratio of 1.21 further underscores its efficient cash generation capabilities. This robust cash flow management highlights Qualcomm's ability to fund operations and growth initiatives effectively.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
36.04B	38.96B	35.82B	44.20B	33.57B	23.53B
	Gross Profit
20.96B	21.90B	19.95B	25.57B	19.30B	14.28B
	EBIT
11.13B	10.07B	7.79B	15.86B	9.79B	6.25B
	EBITDA
12.75B	12.74B	10.46B	16.56B	11.37B	7.62B
	Net Income Common Stockholders
9.99B	10.14B	7.23B	12.94B	9.04B	5.20B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
13.30B	13.30B	11.32B	6.38B	12.41B	11.21B
	Total Assets
55.15B	55.15B	51.04B	49.01B	41.24B	35.59B
	Total Debt
14.63B	14.63B	15.40B	15.48B	15.74B	15.73B
	Net Debt
6.79B	6.79B	6.95B	12.71B	8.63B	9.02B
	Total Liabilities
28.88B	28.88B	29.46B	31.00B	31.29B	29.52B
	Stockholders Equity
26.27B	26.27B	21.58B	18.01B	9.95B	6.08B
Cash Flow		Free Cash Flow
7.42B	11.16B	9.85B	6.83B	8.65B	4.41B
	Operating Cash Flow
9.42B	12.20B	11.30B	9.10B	10.54B	5.81B
	Investing Cash Flow
-2.27B	-3.62B	762.00M	-5.80B	-3.36B	-5.26B
	Financing Cash Flow
-7.60B	-9.27B	-6.66B	-7.20B	-6.80B	-5.71B

Qualcomm Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 154.46
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 154.46 is below the 20-day moving average (MA) of 166.82, below the 50-day MA of 164.05, and below the 200-day MA of 173.85, indicating a bearish trend. The MACD of -3.11 indicates Positive momentum. The RSI at 35.03 is Neutral, neither overbought nor oversold. The STOCH value of 11.11 is Positive, 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	$173.83B	16.80	39.27%	2.13%	12.13%	36.17%
NVDA	75 Outperform	$2.83T	39.48	91.87%	0.03%	114.20%	146.26%
AMD	73 Outperform	$161.82B	97.92	2.85%	―	13.69%	91.75%
TXN	70 Outperform	$178.42B	37.72	28.39%	2.71%	-10.72%	-26.60%
AVGO	67 Neutral	$934.80B	161.64	8.71%	1.16%	43.99%	-62.55%
Sector *	59 Neutral	$22.39B	11.53	-18.05%	2.31%	5.00%	-25.89%
INTC	54 Neutral	$102.75B	―	-18.89%	2.11%	-2.08%	-1212.72%

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.