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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Qualcomm Incorporated (XNAS:QCOM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
QCOM
Name:
QUALCOMM INCORPORATED (XNAS:QCOM)
Sector:
1.47B
Industry:
Semiconductors
CEO:
Mr. Steven Mollenkopf
Total Employees:
45,000
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 62.32% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF QUALCOMM INCORPORATED(QCOM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SEMICONDUCTORS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
128.48
One Month Price Target:
$129.38
Six Month Price Target :
$133.9
Likely Price in One Year's Time:
Ticker:
$139.32
Likely Trading Range Today Under (Normal Volatility)
$127.99
Price Upper limit ($) :
$129.22
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$121.14
This week:
$112.06
This month :
$95.65
Other Primary facts
Market Cap:
142.25B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.12B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.22%
-14.95%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$162.53
$146.77
$94.43
$110.19
Medium risk (<10%) entry points
Buy Call
Sell Call
$141.64
Buy Put:
Sell Put:
$138.28
$115.28
$118.68
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
QCOM
Sharpe Ratio:
3.10%
Comparison:
QCOM, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 0.20% higher than the industry
& ratio is 36.12% higher than the market/S&P 500 average
Average Returns/Yield of
QCOM
Daily returns:
0.10%
Weekly returns:
0.48%
Monthly returns:
1.93%
Yearly returns:
31.95%
Comparison of returns:
Average annual returns/yield (last 3 years) is -27.40% below industry average
Classification:
QCOM, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.83
Statistical test of Returns:
QCOM has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.83%
Weekly Volatility:
6.33%
Monthly Volatility:
12.65%
Yearly Volatility:
43.84%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.36%
Volatility in last five trading days has been -87.20% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.71%
Weekly VaR:
-12.78%
Monthly VaR:
-25.56%
How Much Can the price of
QCOM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-88.53%
This translates to price declining to:
$100.87
This translates to price declining to:
$14.74
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
QCOM is a 80.37% riskier investment compared to the market/S&P 500 & is 54.53% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -20.27% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
QCOM
Beta in relation to market/S&P 500--1.26
Expected beta in 1 year's time:
0.944
Expected beta in 3 year's time:
1.336
Unlevered (debt free) Beta:
0.612
Beta in relation to Nasdaq (XNAS):
1.195
Beta in relation to all global stocks::
0.771
Beta Comparison & Analysis
Beta of competitors/peers::
1.221
Beta is 2.87% higher than peers
Average Industry Beta:
1.41
Beta is -10.94% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
75.51%
Sustainable growth rate is 173.06% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.114
Alpha is -40.21% below industry average alpha yield
Alpha is 728% higher than market/& is unsustainably high
Analysis of Cost of Capital of
QCOM
Equity cost of capital:
0.118
Equity cost of capital is -8.25% below industry mean WACC
Unlevered (without debt) cost of capital:
5.73%
Before-tax cost of debt:
3.50%
After-tax cost of debt:
2.77%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.77%
WACC is -18.85% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$34.96
Revenue growth rate per share of (3Y):
12.73
Annual revenue growth rate is 208.99% above the industry average
EPS:
$9.77
Expected Annual growth rate of EPS (3Y):
33.98%
Expected future EPS growth rate is -34.83% lower than the Semiconductors industry
Free cash flow (FCF) per share:
$6.62
Balance sheet equity growth per share: 12.26%
Equity growth rate per share is -13.40% lower than the industry
Debt per share
$12.21
EBITDA per share
$13.40
Valuation Analysis Today of
QCOM
P/E Ratio:
11.38
P/E Ratio of Competitors/Peers:
20.3
P/E ratio is -43.92% lower than main peers & is -72.56% lower than the industry
Stock price/value with industry average P/E ratio: $405.23
QCOM is -68.29% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $44.41
Present value of the expected future dividends only: $29.81
P/S (Price to Sales ratio):
3.67
Price to sales ratio is -54.79% below the industry mean
P/B (Price to book value ratio):
12.73
Price to free cash flow: 19.41
Price to free cash flow ratio is -58.50% lower than the industry
Net income growth rate (3Y):
-340.49%
Net income growth rate is 494.42% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 6.86%
Dividend yeild: 2.23%
Previous Dividend: $0.75
Previous adjusted dividend: $0.75
Previous Dividend: $2.86
Expected next dividend best case: $0.79
Expected next dividend worst case: $0.71
Average dividend payment (long-term): $0.67
Average dividend increase/decrease (growth rate) % per period: 1.97%
Expected next dividend payment date: 21/09/2022
Expected next dividend record date: 31/08/2022
-
Previous dividend payment date: 23/06/2022
Previous dividend record date: 06/02/2022
-
Dividend History:
2022-06-01--$0.75
2021-12-01--$0.68
2021-06-02--$0.68
2022-03-02--$0.75
2021-09-01--$0.68
2021-03-03--$0.65
Dividend growth rate is -25.80% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
120.96%
Net debt to equity ratio:
80.68%
Debt to assets ratio:
32.01%
Net debt to assets ratio:
21.35%
Debt-to-asset ratio is -17.88% below industry average
Ability to repay debt:
Interest coverage ratio:
27.26
Interest coverage ratio is -16.86% less than industry average
Looking forward:
Debt growth rate:
0.12%
Annual debt growth is -100% lower than industry average debt growth rate
Debt repayment rate in last quarter: 4.92%
Analysis of Key Statistics
Correlation of price movement with the market:
0.718
Statistical significance of correlation:
QCOM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.627
Stock price is 14.53% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.627
Correlation of price movement with Nasdaq (^IXIC):
0.004
Covariance of price movement with the market:
0.007
Kurtosis
4.466
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.246
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
QCOM
Gross Profit Margin Ratio:
234%
Operating Profit Margin Ratio:
32.65%
Operating profit margin is 38.76% higher than the industry
Net Profit Margin Ratio:
234%
Effective Tax Rate:
13.03%
Effective tax rate is -13.64% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
98.46%
Return on equity (ROE) is 244.30% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
26.06%
Return on assets (ROA) is 97.96% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
1.65
Current ratio is -59.43% below industry average
Cash Conversion Cycle (days):
-21.5
Cash conversion cycle is -138.93% below industry average
The remaining useful life of property plant & equipment is: 9.4 years
Stock based compensation to net income ratio:
4.45%
In-depth Efficiency Analysis
Revenue generated per employee:
872.6K
Each employee generates 41% more revenue than industry average revenue per employee
EBITDA generated per employee:
334.4K
Each employee generates 43% more EBITDA than industry average revenue per employee
Profit generated per employee:
248.0K
Each employee generates 54% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
32.8K
Each employee generates 18% more free cash flow than industry average revenue per employee
Assets/Capital per employee
502.2K
Each employee generates 18% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 20.10%
Growth rate in R&D investment/expenditure is 41.96% higher than the industry
Competitors/Peer firms of
QCOM
INTEL CORPORATION (XNAS:INTC)
TEXAS INSTRUMENTS INCORPORATED (XNAS:TXN)
ADOBE INC. (XNAS:ADBE)
ADVANCED MICRO DEVICES, INC. (XNAS:AMD)
Broadcom Inc. (XNAS:AVGO)
CISCO SYSTEMS, INC. (XNAS:CSCO)
APPLIED MATERIALS, INC. (XNAS:AMAT)
MICRON TECHNOLOGY, INC. (XNAS:MU)
ASML Holding NV (XNAS:ASML)
Current Analyst Ratings
Strong buy�13%
Buy�29%
Hold�54%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/27/22
Revenue:
39.27B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
16.29B
22.97B
7.71B
-
2.45B
-
-
10.15B
78.00M
552.00M
1.67B
15.05B
12.82B
11.16B
12.83B
1.67B
11.16B
Statement of Cash Flow
Date:
Period:
406.00M
Differed Income Tax :
272.00M
Stock Based Compensation :
496.00M
Change in Working Capital :
- 2388000.00K
Accounts Receivables:
- 454000.00K
Other Working Capital:
- 78000.00K
Other Non-Cash Items:
- 128000.00K
Net Cash Provided by Operating Activities:
2.06B
Investments in PP&E:
-
Net Acquisitions:
- 238000.00K
Purchases of Investments:
- 517000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
12/26/21
2022
Q1
6.61B
4.70B
11.31B
4.03B
3.86B
1.02B
20.22B
4.72B
7.26B
1.37B
-
1.45B
7.78B
22.60B
8.80B
42.82B
3.53B
2.04B
1.69B
604.00M
6.10B
12.27B
13.71B
5.25B
19.21B
-
31.49B
-
11.28B
58.0M
-
December 26, 2021 at 12:00:00 AM
26.45B
11.33B
42.82B
-
15.75B
9.1B
1.23B
- 583000.00K
- 112000.00K
- 710000.00K
-
- 1178000.00K
- 765000.00K
207.00M
- 2446000.00K
- 8000.00K
- 509000.00K
6.61B
7.12B
2.06B
- 583000.00K
1.47B
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
QCOM
2023
2024
2025
2026
2027
$140.02
$206.84
$224.30
$243.23
$263.76