Qualcomm (NASDAQ:QCOM) Stock Breaks Above Two Hundred Day Moving Average - Time to Sell?

Key Points

• Qualcomm shares moved above their 200-day moving average, trading as high as $174 versus the average of $169.48.
• Fiscal Q4 EPS of $2.17 and revenue of $10.44 billion modestly beat estimates, but revenue fell 8.4% year over year and handset revenue dropped 26%; memory shortages and muted guidance are weighing on the outlook.
• A multiyear deal to supply platforms for SpaceX’s Starlink Mobile U.S. 5G network offers a potential growth opportunity beyond smartphones. Analysts’ average rating is “Hold,” with an average price target of $205.48.

Qualcomm Incorporated (NASDAQ:QCOM - Get Free Report) crossed above its 200-day moving average during trading on Wednesday. The stock has a 200-day moving average of $169.48 and traded as high as $174.00. Qualcomm shares last traded at $173.19, with a volume of 22,074,638 shares.

Qualcomm News Summary

Here are the key news stories impacting Qualcomm this week:

• Positive Sentiment: SpaceX selected Qualcomm’s Dragonwing platforms for Starlink Mobile’s U.S. terrestrial 5G network under a multiyear agreement. Qualcomm called it its largest 5G initiative to date, creating an opportunity to expand beyond phones. SpaceX deal
• Positive Sentiment: Fiscal Q4 adjusted EPS of $2.17 slightly exceeded the $2.16 consensus, while revenue also topped estimates. Q4 results
• Negative Sentiment: Investors reacted to muted earnings guidance, with a memory shortage weighing on smartphone sales. Handset revenue dropped 26%, dragging down overall results; total revenue fell about 8% year over year and EPS declined from $3.00 a year earlier. Earnings outlook and handset weakness
• Negative Sentiment: Automotive revenue grew 90%, but the business remains too small to offset the handset slowdown, leaving near-term growth and profitability under pressure. Phone chip sales analysis

Analysts Set New Price Targets

A number of equities research analysts have issued reports on the company. Rosenblatt Securities reaffirmed a "buy" rating and issued a $235.00 price target on shares of Qualcomm in a research report on Wednesday, September 9th. Zacks Research downgraded Qualcomm from a "hold" rating to a "strong sell" rating in a research report on Tuesday, September 15th. Weiss Ratings restated a "hold (c)" rating on shares of Qualcomm in a research note on Monday, September 21st. TD Cowen raised their target price on shares of Qualcomm from $175.00 to $200.00 and gave the company a "buy" rating in a report on Monday, October 19th. Finally, Susquehanna lifted their price target on shares of Qualcomm from $160.00 to $185.00 and gave the stock a "neutral" rating in a research note on Wednesday, October 21st. Three analysts have rated the stock with a Strong Buy rating, twelve have issued a Buy rating, twenty-one have given a Hold rating and three have given a Sell rating to the stock. Based on data from MarketBeat.com, Qualcomm currently has an average rating of "Hold" and an average price target of $205.48.

Qualcomm Stock Up 5.3%

The company has a quick ratio of 1.28, a current ratio of 2.02 and a debt-to-equity ratio of 0.46. The stock has a market cap of $184.94 billion, a PE ratio of 20.05, a price-to-earnings-growth ratio of 3.70 and a beta of 1.70. The firm has a fifty day moving average of $178.23 and a 200 day moving average of $169.48.

Qualcomm (NASDAQ:QCOM - Get Free Report) last announced its quarterly earnings results on Wednesday, November 4th. The wireless technology company reported $2.17 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $2.16 by $0.01. The company had revenue of $10.44 billion during the quarter, compared to the consensus estimate of $10.12 billion. Qualcomm had a return on equity of 38.36% and a net margin of 21.01%. Qualcomm's revenue for the quarter was down 8.4% on a year-over-year basis. During the same period in the previous year, the business earned $3.00 EPS. On average, equities research analysts anticipate that Qualcomm Incorporated will post 7.71 EPS for the current fiscal year.

Qualcomm Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, December 17th. Stockholders of record on Thursday, December 3rd will be given a dividend of $0.92 per share. This represents a $3.68 annualized dividend and a dividend yield of 2.1%. The ex-dividend date of this dividend is Thursday, December 3rd. Qualcomm's dividend payout ratio (DPR) is 42.59%.

Insiders Place Their Bets

In related news, CEO Cristiano Amon sold 10,000 shares of the company's stock in a transaction that occurred on Friday, September 25th. The stock was sold at an average price of $200.00, for a total value of $2,000,000.00. Following the completion of the transaction, the chief executive officer directly owned 177,568 shares of the company's stock, valued at $35,513,600. This represents a 5.33% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Patricia Grech sold 208 shares of the firm's stock in a transaction dated Monday, August 31st. The stock was sold at an average price of $170.00, for a total value of $35,360.00. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 30,258 shares of company stock worth $5,727,616 in the last three months. 0.05% of the stock is owned by company insiders.

Institutional Investors Weigh In On Qualcomm

Several large investors have recently modified their holdings of the company. BlackRock Inc. acquired a new stake in shares of Qualcomm in the second quarter worth approximately $17,583,115,000. Bank of New York Mellon Corp acquired a new position in Qualcomm during the second quarter worth approximately $1,523,930,000. Deutsche Bank AG acquired a new position in Qualcomm during the second quarter worth approximately $1,178,349,000. Amundi raised its stake in Qualcomm by 94.1% during the second quarter. Amundi now owns 10,195,741 shares of the wireless technology company's stock worth $1,884,071,000 after purchasing an additional 4,942,908 shares during the period. Finally, Van ECK Associates Corp boosted its holdings in shares of Qualcomm by 22.7% in the 2nd quarter. Van ECK Associates Corp now owns 17,202,619 shares of the wireless technology company's stock valued at $3,178,872,000 after purchasing an additional 3,179,720 shares during the last quarter. 74.35% of the stock is owned by institutional investors and hedge funds.

About Qualcomm

Qualcomm Incorporated is a technology company that develops and commercializes wireless communications and semiconductor technologies. Through Qualcomm Technologies, Inc, the company designs integrated circuits, system software and related platforms used in smartphones, personal computers, automobiles, industrial equipment, consumer devices and other connected products. Its Snapdragon platforms support mobile computing, connectivity, artificial intelligence and multimedia applications, while its broader portfolio includes radio-frequency systems, networking and edge-computing technologies.

Qualcomm also operates a significant technology-licensing business through its Qualcomm Technology Licensing segment.

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