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Qualcomm Inc QCOM

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Morningstar’s Analysis

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Qualcomm Reiterates 5G Outlook for 2020 Despite Coronavirus Headwinds; No Change to $80 FVE

Abhinav Davuluri, CFA Sector Strategist

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.

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Company Profile

Business Description

Qualcomm develops and licenses wireless technology and also 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 poised to be 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 many premier handset makers with leading-edge processors.

Contact
5775 Morehouse Drive
San Diego, CA, 92121-1714
T +1 858 587-1121
Sector Technology
Industry Semiconductors
Most Recent Earnings Mar 31, 2020
Fiscal Year End Sep 29, 2020
Stock Type High Yield
Employees 37,000

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