Over the past six months, Qualcomm’s stock price fell to $142.16. Shareholders have lost 10.5% of their capital, which is disappointing considering the S&P 500 has climbed by 7.7%. This may have investors wondering how to approach the situation.
Is now the time to buy Qualcomm, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.
Why Is Qualcomm Not Exciting?
Even though the stock has become cheaper, we don't have much confidence in Qualcomm. Here is one reason you should be careful with QCOM and a stock we'd rather own.
Revenue Projections Show Stormy Skies Ahead
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect Qualcomm’s revenue to drop by 4.8%, a decrease from its 12.5% annualized growth for the past five years. This projection is underwhelming and implies its products and services will see some demand headwinds.
Final Judgment
Qualcomm’s business quality ultimately falls short of our standards. After the recent drawdown, the stock trades at 13.8× forward P/E (or $142.16 per share). This valuation multiple is fair, but we don’t have much faith in the company. We're fairly confident there are better stocks to buy right now. We’d recommend looking at one of our top digital advertising picks.
Stocks We Would Buy Instead of Qualcomm
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