Stellar Revenue Growth Has Helped Qualcomm Return 2x The Market Returns

-7.31%
Downside
158
Market
146
Trefis
QCOM: Qualcomm logo
QCOM
Qualcomm

Qualcomm Inc. (NASDAQ: QCOM) stock price rose more than 2.3x from $57 in 2018 end to over $132 currently, primarily due to favorable changes in its sales. During this period, the company witnessed a stellar 74% jump in revenues, and combined with a higher P/S multiple and a substantial drop in the outstanding share count, the company’s stock price has rallied. Further, over the same period, the S&P 500 returned around 65%, meaning that Qualcomm stock managed to post double these returns since 2018-end.

In our interactive dashboard, Why Qualcomm Stock Moved: QCOM Stock Has Gained 132% Since 2018, we break down the factors behind this move.

(A) Qualcomm’s Total Revenue has grown 74% from $22.6 billion in FY 2018 to $39.2 billion on an LTM basis

  • Qualcomm’s total revenue was roughly stagnant around $22-24 billion between FY 2018 and FY 2020 (Qualcomm’s fiscal year ends in September).
  • However, sales took off in FY 2021, coming in at $33.6 billion, as the accelerated roll-out of 5G drove up both sales volumes and average sales price.
  • The sales growth has persisted into FY ’22, and LTM sales currently stand at almost $40 billion.
  • Equipment and services revenues make up the bulk of Qualcomm’s sales, coming in at almost 80% of the company’s total revenue at $26.7 billion as of FY ’21.
  • For additional details about Qualcomm’s 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’s revenue rose from $22.6 billion in 2018 to $39.3 billion currently, while the outstanding share count decreased at a quick rate, from 1.5 billion in 2018 to around 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 2.9x in 2018 to 7.5x by 2020 end, but has pulled back to 3.8x currently, still around 1.3x higher than its 2018 level

  • Qualcomm’s P/S multiple rose strongly to around 7.5x by late 2020, on the back of rising investor expectations surrounding increased chipset sales and licensing revenues.
  • However, due to the current geopolitical tensions and increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 3.8x.
  • 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 -5% -28% 103%
 S&P 500 Return -5% -17% 76%
 Trefis Multi-Strategy Portfolio -9% -25% 196%

[1] Month-to-date and year-to-date as of 5/12/2022
[2] Cumulative total returns since the end of 2016

 

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates