QCOM Dropped 7.7% In A Day. Have You Fully Evaluated The Risk?
Qualcomm (QCOM) stock is down 7.7% in a day. Already own the stock? You might want to consider holding it. Planning to buy? This might be your opportunity. Consider the following data:
- A $162 Bil company with $42 Bil in revenue currently trading at $146.76.
- Last 12 month revenue growth of 16.1% and operating margin of 27.1%.
- Has Debt to Equity ratio of 0.1 and Cash to Assets ratio of 0.3
- Currently trading at P/E multiple of 14.7 and P/EBIT multiple of 13.2
- Has one instance since 2010 where it dipped >30% in < 30 days and subsequently returned 117% within a year. See QCOM Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for QCOM, see Buy or Sell QCOM Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and QCOM drops another 20-30% to $102.73 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Qualcomm (QCOM) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock saw an impact slightly better than the S&P 500 index during various economic downturns.
QCOM develops and commercializes wireless technologies, supplies integrated circuits and software for 3G/4G/5G, and licenses intellectual property for wireless communication advancements.
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2022 Inflation Shock
- QCOM stock fell 45.1% from a high of $189.28 on 15 December 2021 to $103.88 on 3 November 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 15 May 2024
- Since then, the stock increased to a high of $227.09 on 19 June 2024 , and currently trades at $146.76
| QCOM | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -45.1% | -25.4% |
| # of Days for Full Recovery | 559 | 464 |
2020 Covid Pandemic
- QCOM stock fell 36.5% from a high of $95.91 on 17 January 2020 to $60.91 on 20 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 30 July 2020
| QCOM | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -36.5% | -33.9% |
| # of Days for Full Recovery | 132 | 148 |
2018 Correction
- QCOM stock fell 34.2% from a high of $75.09 on 14 September 2018 to $49.40 on 29 January 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 17 April 2019
| QCOM | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -34.2% | -19.8% |
| # of Days for Full Recovery | 78 | 120 |
2008 Global Financial Crisis
- QCOM stock fell 48.2% from a high of $56.37 on 15 August 2008 to $29.21 on 20 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 10 February 2011
| QCOM | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -48.2% | -56.8% |
| # of Days for Full Recovery | 812 | 1480 |
Worried that QCOM could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.