Qualcomm Stock Has More Than Doubled The Market Returns Since 2017- Here’s Why

-5.59%
Downside
155
Market
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Trefis
QCOM: Qualcomm logo
QCOM
Qualcomm

Qualcomm Inc. (NASDAQ: QCOM) stock price rose almost 2.3x from $64 in 2017 end to over $145 currently, primarily due to favorable changes in its sales. During this period, the company witnessed a stellar 76% jump in revenues, and combined with a slightly higher P/S multiple and a strong drop in the outstanding share count, the company’s stock price has rallied. Additionally, over the same period, the S&P 500 returned around 55%, meaning that Qualcomm stock managed to post more than double these returns since late 2017.

In our interactive dashboard, Why Qualcomm Stock Moved: QCOM Stock Has Gained 127% Since 2017, we break down the factors behind this move.

(A) Qualcomm’s Total Revenue has grown 76% from $22.3 billion in FY 2017 to $39.3 billion on an LTM basis

  • Qualcomm’s total revenue was roughly stagnant around $22-24 billion between FY 2017 and FY 2020 (Qualcomm’s fiscal year ends in September).
  • However, sales took off in FY 2021, rising to $33.6 billion, as the accelerated roll-out of 5G drove sales through 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 made up the bulk of Qualcomm’s sales in FY ’21, coming in at almost 80% of the company’s total revenue at $26.7 billion.
  • For additional details about Qualcomm’s revenues and comparison to peers, see Qualcomm (QCOM) Revenue Comparison
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(B) Revenue per share (RPS) increased 130% from $15.20 in 2017 to $34.93 currently

  • Qualcomm’s revenue rose from $22.3 billion in 2017 to almost $40 billion currently, while the outstanding share count decreased at a quick rate, too, from 1.5 billion in 2018 to around 1.1 billion currently.
  • Due to this, RPS has jumped from $15.20 in FY ’17 to $34.93 currently.

(C) Price-To-Sales (P/S) multiple for Qualcomm rose strongly from 3.2x in 2017 to 7.3x by 2020 end, but has pulled back to 4.2x currently, still around 1.3x higher than its 2017 level

  • Qualcomm’s P/S multiple rose strongly to around 7.3x 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 4.2x.
  • 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 Aug 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 QCOM Return 0% -20% 123%
 S&P 500 Return 1% -13% 86%
 Trefis Multi-Strategy Portfolio 1% -13% 249%

[1] Month-to-date and year-to-date as of 8/25/2022
[2] Cumulative total returns since the end of 2016

 

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