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

Uncover the hidden value in QUALCOMM INC (NASDAQ:QCOM) as our stock screening tool recommends it as an undervalued choice. NASDAQ:QCOM maintains a robust financial position and offers an attractive pricing perspective. Let's dig deeper into the analysis.

Valuation Analysis for NASDAQ:QCOM

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NASDAQ:QCOM has achieved 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 80.95% of the companies listed in the same industry.
• QCOM is valuated rather cheaply when we compare the Price/Earnings ratio to 25.98, which is the current average of the S&P500 Index.
• 89.52% of the companies in the same industry are more expensive than QCOM, based on the Price/Forward Earnings ratio.
• QCOM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 20.90.
• Based on the Enterprise Value to EBITDA ratio, QCOM is valued a bit cheaper than the industry average as 72.38% of the companies are valued more expensively.
• Based on the Price/Free Cash Flow ratio, QCOM is valued cheaper than 91.43% of the companies in the same industry.
• QCOM has an outstanding profitability rating, which may justify a higher PE ratio.

How do we evaluate the Profitability 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 8 for profitability:

• QCOM's Return On Assets of 14.17% is fine compared to the rest of the industry. QCOM outperforms 79.05% of its industry peers.
• The Return On Equity of QCOM (33.51%) is better than 89.52% of its industry peers.
• With an excellent Return On Invested Capital value of 16.50%, QCOM belongs to the best of the industry, outperforming 81.90% of the companies in the same industry.
• QCOM had an Average Return On Invested Capital over the past 3 years of 24.51%. This is significantly above the industry average of 12.11%.
• The 3 year average ROIC (24.51%) for QCOM is well above the current ROIC(16.50%). The reason for the recent decline needs to be investigated.
• Looking at the Profit Margin, with a value of 20.19%, QCOM is in the better half of the industry, outperforming 73.33% of the companies in the same industry.
• The Operating Margin of QCOM (24.15%) is better than 77.14% of its industry peers.
• In the last couple of years the Operating Margin of QCOM has grown nicely.
• QCOM has a Gross Margin of 55.70%. This is in the better half of the industry: QCOM outperforms 69.52% of its industry peers.

Health Analysis for NASDAQ:QCOM

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:QCOM has received a 7 out of 10:

• An Altman-Z score of 5.31 indicates that QCOM is not in any danger for bankruptcy at the moment.
• QCOM has a debt to FCF ratio of 1.56. This is a very positive value and a sign of high solvency as it would only need 1.56 years to pay back of all of its debts.
• QCOM has a Debt to FCF ratio of 1.56. This is in the better half of the industry: QCOM outperforms 69.52% of its industry peers.
• Even though the debt/equity ratio score it not favorable for QCOM, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
• QCOM has a Current Ratio of 2.33. This indicates that QCOM is financially healthy and has no problem in meeting its short term obligations.

How We Gauge Growth for NASDAQ:QCOM

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:QCOM has received a 4 out of 10:

• QCOM shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 19.65% yearly.
• The Revenue has been growing by 9.64% on average over the past years. This is quite good.
• The Earnings Per Share is expected to grow by 10.22% on average over the next years. This is quite good.

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Check the latest full fundamental report of QCOM for a complete fundamental analysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.