Qualcomm (NASDAQ:QCOM) Stock Falls 9.5% After Analyst Downgrade

Key Points

• Qualcomm shares fell 9.5% to $156.75 after TD Cowen lowered its price target from $200 to $185, while maintaining a Buy rating; trading volume was 164% above average.
• Qualcomm narrowly beat quarterly estimates, reporting EPS of $2.17 and revenue of $10.44 billion, but revenue declined 8.4% year over year. Soft profit guidance, handset weakness and margin concerns weighed on sentiment.
• Several analysts have cut their targets or kept neutral ratings. MarketBeat’s analyst consensus is Hold, with an average target of $199.45.

Qualcomm Incorporated (NASDAQ:QCOM - Get Free Report)'s stock price dropped 9.5% during trading on Thursday after TD Cowen lowered their price target on the stock from $200.00 to $185.00. TD Cowen currently has a buy rating on the stock. Qualcomm traded as low as $148.25 and last traded at $156.75. 39,910,222 shares were traded during trading, an increase of 164% from the average session volume of 15,144,726 shares. The stock had previously closed at $173.19.

Other equities analysts have also issued research reports about the stock. Cantor Fitzgerald cut their price target on shares of Qualcomm from $200.00 to $165.00 and set a "neutral" rating on the stock in a report on Monday, July 27th. Susquehanna decreased their price objective on Qualcomm from $185.00 to $165.00 and set a "neutral" rating for the company in a report on Thursday. Sanford C. Bernstein lowered their target price on Qualcomm from $165.00 to $155.00 and set a "market perform" rating for the company in a research report on Monday. Wells Fargo & Company cut their target price on Qualcomm from $265.00 to $170.00 and set an "equal weight" rating on the stock in a report on Thursday, July 30th. Finally, Zacks Research lowered Qualcomm from a "hold" rating to a "strong sell" rating in a research report on Tuesday, September 15th. Three investment analysts have rated the stock with a Strong Buy rating, twelve have assigned a Buy rating, twenty-one have issued a Hold rating and three have assigned a Sell rating to the stock. According to data from MarketBeat, Qualcomm has an average rating of "Hold" and an average target price of $199.45.

Insider Activity

In other news, CEO Cristiano R. Amon sold 10,000 shares of the stock in a transaction on Friday, September 25th. The shares were sold at an average price of $200.00, for a total transaction of $2,000,000.00. Following the completion of the sale, the chief executive officer directly owned 177,568 shares in the company, valued at $35,513,600. This represents a 5.33% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Patricia Y. Grech sold 625 shares of Qualcomm stock in a transaction on Friday, August 21st. The stock was sold at an average price of $162.85, for a total transaction of $101,781.25. Following the transaction, the chief accounting officer directly owned 208 shares of the company's stock, valued at $33,872.80. This represents a 75.03% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 30,258 shares of company stock worth $5,727,616 over the last quarter. Company insiders own 0.05% of the company's stock.

More Qualcomm News

Here are the key news stories impacting Qualcomm this week:

• Positive Sentiment: Qualcomm reported fiscal Q4 EPS of $2.17 and revenue of about $10.44 billion, edging past consensus. Automotive revenue surged 89%, while the company sees data-center revenue reaching $5 billion in fiscal 2027. QCOM Q4 Earnings Beat Estimates on Robust Automotive Growth
• Positive Sentiment: SpaceX selected Qualcomm’s Dragonwing platforms and software for Starlink Mobile’s planned U.S. 5G network, creating a significant infrastructure opportunity. Qualcomm signs major 5G infrastructure deal with SpaceX
• Negative Sentiment: Soft profit guidance and margin concerns are overshadowing the earnings beat. Revenue fell 8.4% year over year, with handset sales down sharply; investors are also concerned about declining Apple-related handset revenue and lower margins as newer businesses grow. Qualcomm Beat Earnings, But Its Fastest-Growing Businesses Have a Catch
• Negative Sentiment: Analysts have cut price targets: Susquehanna lowered its target to $165 and Rosenblatt reduced its target to $205, although Rosenblatt maintained a Buy rating. Broader chip-sector weakness and concerns about data-center demand added pressure. Qualcomm slides after earnings, leading post-election chip stock sell-off

Institutional Trading of Qualcomm

Large investors have recently bought and sold shares of the business. ABS Investment Management LLC bought a new stake in shares of Qualcomm in the second quarter worth about $34,000. ABS Direct Equity Fund LLC bought a new position in Qualcomm during the 2nd quarter valued at approximately $34,000. Mizuho Securities Co. Ltd. bought a new position in Qualcomm during the 3rd quarter valued at approximately $35,000. Your Advocates Ltd. LLP purchased a new stake in Qualcomm in the 1st quarter worth approximately $26,000. Finally, Team Financial Group LLC purchased a new stake in Qualcomm in the 3rd quarter worth approximately $38,000. 74.35% of the stock is currently owned by institutional investors and hedge funds.

Qualcomm Trading Down 9.5%

The firm has a market cap of $167.38 billion, a PE ratio of 18.14, a PEG ratio of 3.70 and a beta of 1.70. The firm has a fifty day simple moving average of $178.23 and a two-hundred day simple moving average of $169.48. The company has a current ratio of 2.02, a quick ratio of 1.28 and a debt-to-equity ratio of 0.46.

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

Qualcomm Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, December 17th. Shareholders of record on Thursday, December 3rd will be issued a $0.92 dividend. The ex-dividend date is Thursday, December 3rd. This represents a $3.68 annualized dividend and a yield of 2.3%. Qualcomm's dividend payout ratio is 42.59%.

Qualcomm Company Profile

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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