Analyst Note| Abhinav Davuluri, CFA |
Qualcomm reported fiscal second-quarter results with revenue in line with management’s guidance. Management estimated overall handset shipments were down about 21% during the quarter due to a sharp decrease in demand in China, though it noted China sales gradually improved exiting March. Furthermore, the firm guided the overall handset market to be down about 30% in the upcoming quarter. While the outlook for the overall smartphone market appears bleak, we note management did not change its 2020 5G smartphone forecast (midpoint of 200 million units). We are maintaining our fair value estimate of $80 per share for narrow-moat Qualcomm.