Qualcomm Stock Has Returned 2x More Than The S&P 500 Since 2018- Here’s Why
Qualcomm Inc. (NASDAQ: QCOM) stock price rose 2.5x from $57 in 2018 end to around $141 currently, primarily due to favorable changes in its revenue. During this period, the company also witnessed a favorable rise in its P/S multiple, and a substantial drop in the outstanding share count, which further boosted the company’s revenue per share. Further, over the same period, the S&P 500 returned around 65%, meaning that Qualcomm stock massively outperformed the broader markets.
In our interactive dashboard, Why Qualcomm Stock Moved: QCOM Stock Has Gained 149% Since 2018, we break down the factors behind this move.
(A) QCOM’s Total Revenue has grown 74% from $22.6 billion in 2018 to almost $40 billion on an LTM basis
- Qualcomm’s total revenue initially saw a slow rise from $22.6 billion in 2018 to $23.5 billion in 2020, before accelerating to $33.6 billion in FY ’21, and standing at as high as $39.3 billion currently (Qualcomm’s fiscal year ends in September).
- Qualcomm, a semiconductor multinational, creates chipsets, software, and services related to wireless technology, owning and licensing patents critical to the 5G and 4G mobile communications standards, among others.
- Qualcomm’s equipment and services sales stood at $26.7 billion as of FY ’21, making up almost 80% of FY ’21 net sales, with licensing revenues making up the remaining 20%.
- For additional details about Qualcomm revenues and comparison to peers, see Qualcomm (QCOM) Revenue Comparison
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(B) Revenue per share (RPS) increased 126% from $15.44 in 2018 to $34.93 currently
- Qualcomm revenue rose from $22.6 billion in 2018 to $39.3 billion currently, while the outstanding share count decreased at a quick rate too, from 1.5 billion in 2018 to 1.1 billion currently.
- Due to this, RPS has jumped from $15.44 in FY ’18 to $34.93 currently.
(C) Price-To-Sales (P/S) multiple for Qualcomm rose strongly from 2.7x in 2018 to 7x by 2020 end but has pulled back to 4.1x currently, still around 1.5x higher than its 2018 level
- Due to Qualcomm’s stellar sales growth between 2018-end to 2021, its P/S multiple rose strongly from 2.7x in 2018 to as high as 7x in late-2020, on the back of rising investor expectations surrounding strong 5G chipsets demand growth.
- However, due to current geopolitical tensions and increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back substantially, currently standing at around 4.1x.
- For additional details about the company stock returns and comparison to peers, see Qualcomm (QCOM) Stock Return Comparison.
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| Returns | May 2022 MTD [1] |
2022 YTD [1] |
2017-22 Total [2] |
| QCOM Return | 1% | -23% | 117% |
| S&P 500 Return | 0% | -13% | 84% |
| Trefis Multi-Strategy Portfolio | -1% | -18% | 222% |
[1] Month-to-date and year-to-date as of 5/6/2022
[2] Cumulative total returns since the end of 2016
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