QUALCOMM, Inc.(QCOM) Blows Past Estimates Again

Valuations and Metrics

Currently trading at a bit of a premium to the 14.67x industry P/E average, Qualcomm has a P/E of 18.12. However, the forward P/E is only 13.21. The price to sales is also a little high at 5.66, but the operating margin is very impressive at around 30% and rising. The return on equity is pretty decent at 17.46. NVIDIA Corporation (NASDAQ:NVDA), who is attempting to compete with Qualcomm’s mobile chips, trades at 15.38x earnings and only 1.87 to sales. Yet, they don’t maintain the kind of margins or market share that Qualcomm achieves and don’t have nearly the same kind of size. NVIDIA is, according to some, having a hard time making the transition from a PC graphic chip manufacturer to a relevant player in the mobile processing arena, although their Tegra line of mobile CPU’s is starting to gain some traction in the smartphone market.

Bottom Line

Again, Qualcomm delivered blowout earnings in the most recent report. Surfing the smartphone and mobile computing revolution, earnings were up in double-digit territory yet again. The prospects for the coming year are encouraging despite tough macro-economic circumstances, and it looks like Qualcomm could deliver some more upside in the near future.