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NASDAQ:QCOM stands out as a stock that provides good value for the fundamentals it showcases.

By Mill Chart

Last update: Nov 28, 2023

Discover QUALCOMM INC (NASDAQ:QCOM), an undervalued stock highlighted by our stock screener. NASDAQ:QCOM showcases solid financial health and profitability while maintaining an appealing valuation. We'll explore the details.

Understanding NASDAQ:QCOM's Valuation Score

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:QCOM has received a 7 out of 10:

  • Based on the Price/Earnings ratio, QCOM is valued cheaper than 80.95% of the companies in the same industry.
  • The average S&P500 Price/Earnings ratio is at 24.49. QCOM is valued slightly cheaper when compared to this.
  • Based on the Price/Forward Earnings ratio, QCOM is valued a bit cheaper than 79.05% of the companies in the same industry.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 19.61, QCOM is valued a bit cheaper.
  • Based on the Enterprise Value to EBITDA ratio, QCOM is valued a bit cheaper than 74.29% of the companies in the same industry.
  • Based on the Price/Free Cash Flow ratio, QCOM is valued cheaply inside the industry as 91.43% of the companies are valued more expensively.
  • The excellent profitability rating of QCOM may justify a higher PE ratio.
  • A more expensive valuation may be justified as QCOM's earnings are expected to grow with 12.60% in the coming years.

Exploring NASDAQ:QCOM's Profitability

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:QCOM has earned a 8 out of 10:

  • Looking at the Return On Assets, with a value of 14.17%, QCOM is in the better half of the industry, outperforming 78.10% of the companies in the same industry.
  • The Return On Equity of QCOM (33.51%) is better than 89.52% of its industry peers.
  • QCOM's Return On Invested Capital of 16.50% is amongst the best of the industry. QCOM outperforms 81.90% of its industry peers.
  • The Average Return On Invested Capital over the past 3 years for QCOM is significantly above the industry average of 12.18%.
  • The last Return On Invested Capital (16.50%) for QCOM is well below the 3 year average (24.51%), which needs to be investigated, but indicates that QCOM had better years and this may not be a problem.
  • With a decent Profit Margin value of 20.19%, QCOM is doing good in the industry, outperforming 73.33% of the companies in the same industry.
  • Looking at the Operating Margin, with a value of 24.15%, QCOM is in the better half of the industry, outperforming 77.14% of the companies in the same industry.
  • In the last couple of years the Operating Margin of QCOM has grown nicely.
  • QCOM's Gross Margin of 55.70% is fine compared to the rest of the industry. QCOM outperforms 69.52% of its industry peers.

How We Gauge Health for NASDAQ:QCOM

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:QCOM was assigned a score of 8 for health:

  • An Altman-Z score of 5.05 indicates that QCOM is not in any danger for bankruptcy at the moment.
  • Looking at the Altman-Z score, with a value of 5.05, QCOM is in the better half of the industry, outperforming 60.95% of the companies in the same industry.
  • The Debt to FCF ratio of QCOM is 1.56, which is an excellent value as it means it would take QCOM, only 1.56 years of fcf income to pay off all of its debts.
  • Looking at the Debt to FCF ratio, with a value of 1.56, QCOM is in the better half of the industry, outperforming 70.48% of the companies in the same industry.
  • Although QCOM does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
  • A Current Ratio of 2.33 indicates that QCOM has no problem at all paying its short term obligations.
  • The current and quick ratio evaluation for QCOM is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Evaluating Growth: NASDAQ:QCOM

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:QCOM scores a 4 out of 10:

  • The Earnings Per Share has been growing by 19.65% on average over the past years. This is quite good.
  • The Revenue has been growing by 9.64% on average over the past years. This is quite good.
  • QCOM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.29% yearly.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of QCOM

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.

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QUALCOMM INC

NASDAQ:QCOM (2/23/2024, 7:07:50 PM)

After market: 154.65 -0.26 (-0.17%)

154.91

+0.16 (+0.1%)

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