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San Diego, California-based QUALCOMM Incorporated (QCOM) develops and commercialises foundational technologies for the wireless industry. It is valued at a market cap of $160.1 billion.
This tech company has considerably underperformed the broader market over the past 52 weeks. Shares of QCOM have gained 6.2% over this time frame, while the broader S&P 500 Index ($SPX) has soared 29.1%. Moreover, on a YTD basis, the stock is down 8.8%, compared to SPX’s 4.3% rise.
Narrowing the focus, QCOM has also notably lagged the State Street Technology Select Sector SPDR ETF (XLK), which surged 52.2% over the past 52 weeks and 10.5% on a YTD basis.
On Apr. 29, QCOM delivered mixed Q2 earnings results after the market closed. Due to lower QCT segment revenue, the company’s total revenue declined 3.5% year-over-year to $10.6 billion, missing analyst estimates by a slight margin. Meanwhile, its adjusted EPS also fell 7% from the year-ago quarter to $2.65, but it topped the Wall Street forecast of $2.57.
For the current fiscal year, ending in September, analysts expect QCOM’s EPS to decline 18.5% year over year to $8.21. The company’s earnings surprise history is promising. It exceeded the consensus estimates in each of the last four quarters.
Among the 34 analysts covering the stock, the consensus rating is a “Hold,” which is based on nine “Strong Buy,” one "Moderate Buy,” 19 “Hold,” two "Moderate Sell,” and three “Strong Sell” ratings.
The configuration is less bullish than a month ago, with an overall “Moderate Buy” rating, consisting of 10 analysts suggesting a "Strong Buy” rating.
On Apr. 28, AllianceBernstein Holding L.P. (AB) analyst Stacy Rasgon maintained a “Hold” rating on QCOM and set a price target of $140.
While the company is trading above its mean price target of $155.85, its Street-high price target of $205 suggests a 31.4% potential upside from the current levels.
