NASDAQ:QCOM appears to be flying under the radar despite its strong fundamentals.

Consider QUALCOMM INC (NASDAQ:QCOM) as a top value stock, identified by our stock screening tool. NASDAQ:QCOM shines in terms of profitability, solvency, and liquidity, all while remaining very reasonably priced. Let's dive deeper into the analysis.

Deciphering NASDAQ:QCOM's Valuation Rating

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NASDAQ:QCOM scores a 7 out of 10:

• Compared to the rest of the industry, the Price/Earnings ratio of QCOM indicates a rather cheap valuation: QCOM is cheaper than 85.19% of the companies listed in the same industry.
• QCOM is valuated rather cheaply when we compare the Price/Earnings ratio to 27.94, which is the current average of the S&P500 Index.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of QCOM indicates a rather cheap valuation: QCOM is cheaper than 87.04% of the companies listed in the same industry.
• Compared to an average S&P500 Price/Forward Earnings ratio of 24.11, QCOM is valued a bit cheaper.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of QCOM indicates a somewhat cheap valuation: QCOM is cheaper than 75.93% of the companies listed in the same industry.
• 92.59% of the companies in the same industry are more expensive than QCOM, based on the Price/Free Cash Flow ratio.
• The excellent profitability rating of QCOM may justify a higher PE ratio.

Profitability Examination for NASDAQ:QCOM

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:QCOM was assigned a score of 9 for profitability:

• Looking at the Return On Assets, with a value of 18.39%, QCOM belongs to the top of the industry, outperforming 92.59% of the companies in the same industry.
• QCOM's Return On Equity of 38.60% is amongst the best of the industry. QCOM outperforms 93.52% of its industry peers.
• QCOM's Return On Invested Capital of 18.14% is amongst the best of the industry. QCOM outperforms 90.74% of its industry peers.
• Measured over the past 3 years, the Average Return On Invested Capital for QCOM is significantly above the industry average of 11.96%.
• The Profit Margin of QCOM (26.03%) is better than 87.04% of its industry peers.
• In the last couple of years the Profit Margin of QCOM has grown nicely.
• QCOM's Operating Margin of 26.32% is amongst the best of the industry. QCOM outperforms 86.11% of its industry peers.
• QCOM's Operating Margin has improved in the last couple of years.
• With a decent Gross Margin value of 56.22%, QCOM is doing good in the industry, outperforming 77.78% of the companies in the same industry.

How do we evaluate the Health for NASDAQ:QCOM?

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:QCOM scores a 7 out of 10:

• An Altman-Z score of 6.09 indicates that QCOM is not in any danger for bankruptcy at the moment.
• QCOM has a Altman-Z score of 6.09. This is in the better half of the industry: QCOM outperforms 62.96% of its industry peers.
• QCOM has a debt to FCF ratio of 1.31. This is a very positive value and a sign of high solvency as it would only need 1.31 years to pay back of all of its debts.
• QCOM has a better Debt to FCF ratio (1.31) than 76.85% 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 2.40. This indicates that QCOM is financially healthy and has no problem in meeting its short term obligations.

Unpacking NASDAQ:QCOM's Growth Rating

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:QCOM, the assigned 6 reflects its growth potential:

• The Earnings Per Share has grown by an impressive 21.40% over the past year.
• QCOM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 23.53% yearly.
• The Revenue has grown by 8.77% in the past year. This is quite good.
• The Revenue has been growing by 14.76% on average over the past years. This is quite good.
• The Earnings Per Share is expected to grow by 10.61% on average over the next years. This is quite good.

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

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

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.