Qualcomm Stock Has Returned 2x More Than The S&P 500 Since 2018- Here’s Why

-13.74%
Downside
170
Market
146
Trefis
QCOM: Qualcomm logo
QCOM
Qualcomm

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
Relevant Articles
  1. Will Qualcomm Stock Return To Pre-Inflation Shock Highs Of $189?
  2. Will Qualcomm Stock Return To Pre-Inflation Shock Highs Of $190?
  3. With Expectations Low For Q4, Will Qualcomm Spring A Surprise?
  4. Will Qualcomm Stock Return To Pre-Inflation Shock Highs Of Over $180?
  5. Will Qualcomm Stock Recover To Highs Seen Prior To Inflation Shock?
  6. Can Qualcomm Count On Automotive Sector To Drive Its Next Wave Of Growth?

(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.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

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

 

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates