QCOM - Embedded Expectations Analysis - 2019 09 04
QUALCOMM Incorporated (QCOM:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with an 19.9x Uniform P/E. At these levels, markets have muted expectations for the firm, and management may be concerned about their margins, demand, and transitioning to 5G.Specifically, management appears concerned about weakening demand for their 4G solutions, the pivot from 4G to 5G, and Chinese demand. Furthermore, they may be concerned about the sustainability of recent QCT gross margin improvements, and they may be concerned about slowing device shipments from Chinese handset makers. Additionally, they appear concerned about softness in India, and they may lack confidence in the sustainability of recent MSM shipment growth trends. Moreover, they may have concerns about the impact of China-related weakness on QCT revenues, and they may lack confidence in their ability to meet their share count reduction goals.
Qualcomm is engaged in the development and commercialization of foundational technologies for the wireless industry. The company's segments include: Qualcomm CDMA Technologies, which is a developer and supplier of integrated circuits and system software based on code division multiple access, orthogonal frequency division multiple access and other technologies; Qualcomm Technology Licensing, which grants licenses or otherwise provides rights to use portions of its intellectual property portfolio, which, among other rights, include certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products; and Qualcomm Strategic Initiatives, which makes investments.
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