Qualcomm Stock Before Q4 Earnings: To Buy or Not to Buy?

Core Viewpoint - Qualcomm is expected to report strong earnings for the fourth quarter of fiscal 2024, with revenue estimates at $9.9 billion and earnings per share (EPS) at $2.56, reflecting an upward revision in earnings estimates for 2024 and 2025 [1][2]. Earnings Estimates - The current EPS estimate for Q4 2024 is $2.56, consistent over the past week, with a slight increase from $2.54 90 days ago [2]. - For the fiscal year 2024, the EPS estimate has improved from $10.05 to $10.08, while for 2025, it has increased from $10.92 to $10.93 [1][2]. Earnings Surprise History - Qualcomm has a strong earnings surprise history, averaging a 7.6% surprise over the last four quarters, with the most recent quarter showing a 3.6% surprise [3][4]. Earnings Whispers - The company has a positive Earnings Surprise Prediction (ESP) of +0.48% and a Zacks Rank of 2 (Buy), indicating a high likelihood of beating earnings estimates [5]. Factors Influencing Results - The rollout of 5G technology is a significant driver for Qualcomm, enhancing its licensing program and diversifying revenue streams [6]. - The company is leveraging artificial intelligence (AI) to meet growing demands in the digital transformation landscape [6]. Product Developments - Qualcomm's Snapdragon 8 Gen 3 Mobile Platform has been deployed in Samsung's Galaxy Z series smartphones, showcasing its advancements in mobile technology [7]. - The Snapdragon 8s Gen 3 platform features enhanced gaming and AI capabilities, highlighting Qualcomm's position in the AI chip market [8]. Strategic Collaborations - Qualcomm partnered with Aramco to implement generative AI-powered IoT solutions in Saudi Arabia, enhancing operational efficiency through advanced technologies [9][10]. Price Performance - Over the past year, Qualcomm's stock has increased by 37.8%, although it has underperformed compared to the industry average growth of 51.1% [11]. Valuation Metrics - Qualcomm's shares are trading at a forward price/earnings ratio of 14.96, which is lower than the industry average of 21.62 and its historical mean of 17.6, indicating a relatively cheaper valuation [13]. Investment Considerations - Qualcomm is a leading manufacturer of wireless chipsets, focusing on maintaining its leadership in 5G and mobile connectivity through innovative product launches [14][15]. - The company is well-positioned to capitalize on growth opportunities in the mobile sector, particularly with its Snapdragon portfolio and advancements in driver-assistance technology [15]. Conclusion - With strong fundamentals, improving earnings estimates, and a favorable valuation, Qualcomm presents a solid investment opportunity, supported by a robust earnings surprise history and positive investor sentiment [16][17].