Qualcomm Inc (QCOM)

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Earnings Preview: Qualcomm Inc. (NASDAQ: QCOM)
By: 24/7 Wall St. | August 1, 2023

• Here is a preview of what to expect from five companies reporting results after Wednesday’s closing bell.

Qualcomm

Networking chip and equipment maker Qualcomm Inc. (NASDAQ: QCOM) has dropped about 9.7% from its share price over the past 12 months. The Dow Jones industrial average component could be a real value at its current share price, or it could be a value trap.

The company has been working on a way to shrink AI language models to fit on a cell phone. Qualcomm beamed at the recent announcement of Meta Platforms’ decision to release its Llama 2 large language model as open source. If, as the company believes, Qualcomm is way ahead of all its competitors in figuring out how to run AI algorithms on a smartphone, the stock is a bargain. If not, well, not so much.

Of 33 analysts covering Qualcomm, 25 have a Buy or Strong Buy rating and another seven rate it at Hold. At a share price of around $131.00, the upside potential based on a median price target of $140.00 is 6.9%. At the high target of $159.00, the upside potential is 21.4%.

Third-quarter fiscal 2023 revenue is forecast to come in at $8.51 billion, down 8.2% sequentially and 22.1% lower year over year. Adjusted EPS are forecast at $1.81, down 15.4% sequentially and by 38.9% year over year. For the full fiscal year ending in September, analysts expect the company to post EPS of $8.25, down 34.1%, on sales of $36.05 billion, down 18.4%.
Qualcomm stock trades at 15.9 times expected 2023 EPS, 13.7 times estimated 2024 earnings of $9.60 and 13.0 times estimated 2025 earnings of $10.12 per share. The 52-week range is $101.47 to $152.91. Qualcomm pays an annual dividend of $3.20 (yield of 2.42%). Total shareholder return over the past 12 months was negative 7.02%.

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