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Qualcomm Inc QCOM Stock Quote

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Morningstar‘s Stock Analysis QCOM

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Smartphone Weakness Finally Catches Up to Qualcomm As Inventories Build, Lowering FVE to $140

Abhinav Davuluri, CFA Sector Strategist

Analyst Note

| Abhinav Davuluri, CFA |

Qualcomm's fiscal fourth-quarter revenue was consistent with our expectations, the firm benefiting from the ongoing ramp of 5G smartphones and broad-based chip demand. Guidance was lower than our expectations though. This was due to weakness in Android smartphones and consumer Internet of Things, due to macroeconomic headwinds and China's COVID-19 lockdowns that resulted in elevated channel inventories. For calendar 2022, smartphone volumes are estimated to be down in the low double digits. We lower our fair value estimate to $140 per share from $163, as we expect fiscal 2023 to be a cyclical downturn for Qualcomm. Shares fell 8% during after-hours trading and are undervalued. Management estimates there is about 8-10 weeks of elevated inventory in the channel, which we think will take at least a few quarters to work through.

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Key Statistics QCOM

Company Profile QCOM

Business Description

Qualcomm develops and licenses wireless technology and designs chips for smartphones. The company's key patents revolve around CDMA and OFDMA technologies, which are standards in wireless communications that are the backbone of all 3G and 4G networks. The firm is a leader in 5G network technology as well. Qualcomm's IP is licensed by virtually all wireless device makers. The firm is also the world's largest wireless chip vendor, supplying nearly every premier handset maker with leading-edge processors. Qualcomm also sells RF-front end modules into smartphones and chips into automotive and Internet of Things markets.

5775 Morehouse Drive
San Diego, CA, 92121-1714
T +1 858 587-1121
Industry Semiconductors
Most Recent Earnings Sep 30, 2022
Fiscal Year End Sep 27, 2023
Employees 51,000

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