NASDAQ:QCOM stands out as a stock that provides good value for the fundamentals it showcases.

Our stock screener has singled out QUALCOMM INC (NASDAQ:QCOM) as a stellar value proposition. NASDAQ:QCOM not only scores well in profitability, solvency, and liquidity but also maintains a very reasonable price point. We'll explore this further.

How We Gauge Valuation for NASDAQ:QCOM

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:QCOM was assigned a score of 7 for valuation:

• 82.57% of the companies in the same industry are more expensive than QCOM, based on the Price/Earnings ratio.
• The average S&P500 Price/Earnings ratio is at 28.69. QCOM is valued slightly cheaper when compared to this.
• Based on the Price/Forward Earnings ratio, QCOM is valued cheaper than 82.57% of the companies in the same industry.
• QCOM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 20.54.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of QCOM indicates a somewhat cheap valuation: QCOM is cheaper than 79.82% of the companies listed in the same industry.
• Based on the Price/Free Cash Flow ratio, QCOM is valued cheaply inside the industry as 90.83% of the companies are valued more expensively.
• QCOM has an outstanding profitability rating, which may justify a higher PE ratio.
• A more expensive valuation may be justified as QCOM's earnings are expected to grow with 14.32% in the coming years.

Assessing Profitability for NASDAQ:QCOM

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:QCOM has achieved a 9:

• Looking at the Return On Assets, with a value of 15.77%, QCOM belongs to the top of the industry, outperforming 87.16% of the companies in the same industry.
• QCOM has a Return On Equity of 34.27%. This is amongst the best in the industry. QCOM outperforms 93.58% of its industry peers.
• QCOM has a better Return On Invested Capital (16.23%) than 88.07% of its industry peers.
• QCOM had an Average Return On Invested Capital over the past 3 years of 24.51%. This is significantly above the industry average of 10.84%.
• The 3 year average ROIC (24.51%) for QCOM is well above the current ROIC(16.23%). The reason for the recent decline needs to be investigated.
• QCOM's Profit Margin of 23.03% is amongst the best of the industry. QCOM outperforms 81.65% of its industry peers.
• With an excellent Operating Margin value of 24.85%, QCOM belongs to the best of the industry, outperforming 82.57% of the companies in the same industry.
• QCOM's Operating Margin has improved in the last couple of years.
• QCOM has a Gross Margin of 55.80%. This is in the better half of the industry: QCOM outperforms 75.23% of its industry peers.

Assessing Health for NASDAQ:QCOM

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:QCOM has earned a 7 out of 10:

• QCOM has an Altman-Z score of 6.57. This indicates that QCOM is financially healthy and has little risk of bankruptcy at the moment.
• QCOM's Altman-Z score of 6.57 is fine compared to the rest of the industry. QCOM outperforms 66.06% of its industry peers.
• The Debt to FCF ratio of QCOM is 1.26, which is an excellent value as it means it would take QCOM, only 1.26 years of fcf income to pay off all of its debts.
• Looking at the Debt to FCF ratio, with a value of 1.26, QCOM is in the better half of the industry, outperforming 74.31% of the companies in the same industry.
• Although QCOM does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
• QCOM has a Current Ratio of 2.65. This indicates that QCOM is financially healthy and has no problem in meeting its short term obligations.

Deciphering NASDAQ:QCOM's Growth Rating

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:QCOM, the assigned 4 reflects its growth potential:

• The Earnings Per Share has been growing by 19.65% on average over the past years. This is quite good.
• QCOM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.64% yearly.
• Based on estimates for the next years, QCOM will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.30% on average per year.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Our latest full fundamental report of QCOM contains the most current fundamental analsysis.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.