Here's Why Qualcomm (QCOM) Fell More Than Broader Market

Qualcomm (QCOM) closed at $137.00 in the latest trading session, marking a -1.8% move from the prior day. This change lagged the S&P 500's 0.57% loss on the day. Elsewhere, the Dow saw a downswing of 1.61%, while the tech-heavy Nasdaq depreciated by 0.26%.

Heading into today, shares of the chipmaker had lost 6.3% over the past month, lagging the Computer and Technology sector's loss of 0.64% and the S&P 500's loss of 0.15%.

Market participants will be closely following the financial results of Qualcomm in its upcoming release. The company's upcoming EPS is projected at $2.57, signifying a 9.82% drop compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $10.58 billion, indicating a 2.39% downward movement from the same quarter last year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $11.2 per share and a revenue of $44.01 billion, representing changes of -6.9% and -0.29%, respectively, from the prior year.

Investors should also pay attention to any latest changes in analyst estimates for Qualcomm. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there's been a 12.14% fall in the Zacks Consensus EPS estimate. Qualcomm is currently a Zacks Rank #5 (Strong Sell).

From a valuation perspective, Qualcomm is currently exchanging hands at a Forward P/E ratio of 12.46. This denotes a discount relative to the industry average Forward P/E of 37.17.

It is also worth noting that QCOM currently has a PEG ratio of 5.3. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Electronics - Semiconductors industry currently had an average PEG ratio of 2.18 as of yesterday's close.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 85, placing it within the top 35% of over 250 industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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