Investors should take notice of NASDAQ:QCOM—it offers a great deal for the fundamentals it presents.

Take a closer look at QUALCOMM INC (NASDAQ:QCOM), a remarkable value stock uncovered by our stock screener. NASDAQ:QCOM excels in fundamentals and maintains a very reasonable valuation. Let's break it down further.

Understanding NASDAQ:QCOM's Valuation Score

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:QCOM, the assigned 7 reflects its valuation:

• QCOM's Price/Earnings ratio is rather cheap when compared to the industry. QCOM is cheaper than 81.90% of the companies in the same industry.
• QCOM is valuated rather cheaply when we compare the Price/Earnings ratio to 26.18, which is the current average of the S&P500 Index.
• Based on the Price/Forward Earnings ratio, QCOM is valued cheaply inside the industry as 89.52% of the companies are valued more expensively.
• QCOM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.43.
• Based on the Enterprise Value to EBITDA ratio, QCOM is valued a bit cheaper than the industry average as 75.24% of the companies are valued more expensively.
• Based on the Price/Free Cash Flow ratio, QCOM is valued cheaply inside the industry as 90.48% of the companies are valued more expensively.
• QCOM has an outstanding profitability rating, which may justify a higher PE ratio.

Looking at the Profitability

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:QCOM, the assigned 8 is a significant indicator of profitability:

• The Return On Assets of QCOM (14.89%) is better than 79.05% of its industry peers.
• QCOM's Return On Equity of 33.67% is amongst the best of the industry. QCOM outperforms 89.52% of its industry peers.
• The Return On Invested Capital of QCOM (16.56%) is better than 81.90% of its industry peers.
• QCOM had an Average Return On Invested Capital over the past 3 years of 24.51%. This is significantly above the industry average of 12.00%.
• The 3 year average ROIC (24.51%) for QCOM is well above the current ROIC(16.56%). The reason for the recent decline needs to be investigated.
• QCOM's Profit Margin of 21.39% is fine compared to the rest of the industry. QCOM outperforms 76.19% of its industry peers.
• QCOM has a better Operating Margin (24.81%) than 78.10% of its industry peers.
• In the last couple of years the Operating Margin of QCOM has grown nicely.
• QCOM has a better Gross Margin (55.54%) than 67.62% of its industry peers.

ChartMill's Evaluation of Health

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NASDAQ:QCOM, the assigned 7 for health provides valuable insights:

• QCOM has an Altman-Z score of 5.44. This indicates that QCOM is financially healthy and has little risk of bankruptcy at the moment.
• The Altman-Z score of QCOM (5.44) is better than 60.95% of its industry peers.
• QCOM has a debt to FCF ratio of 1.57. This is a very positive value and a sign of high solvency as it would only need 1.57 years to pay back of all of its debts.
• QCOM's Debt to FCF ratio of 1.57 is fine compared to the rest of the industry. QCOM outperforms 69.52% of its industry peers.
• 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.
• QCOM has a Current Ratio of 2.56. This indicates that QCOM is financially healthy and has no problem in meeting its short term obligations.

Understanding NASDAQ:QCOM's Growth

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:QCOM has earned a 5 for growth:

• The Earnings Per Share has been growing by 19.65% on average over the past years. This is quite good.
• QCOM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.64% yearly.
• Based on estimates for the next years, QCOM will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.22% on average per year.
• The Revenue is expected to grow by 8.34% on average over the next years. This is quite good.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Our latest full fundamental report of QCOM contains the most current fundamental analsysis.

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.