Qualcomm (QCOM) Down 7.8% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Qualcomm (QCOM). Shares have lost about 7.8% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Qualcomm due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Qualcomm Surpasses Q1 Earnings Estimates on Record RevenuesQualcomm Incorporated reported strong first-quarter fiscal 2025 results, with adjusted earnings and revenues beating the respective Zacks Consensus Estimate, driven by healthy demand trends in Android handsets and automotive businesses. Both metrics improved year over year, led by the strength of the business model, revenue diversification and the ability to respond proactively to the evolving market scenario.Net IncomeOn a GAAP basis, net income in the December quarter improved to $3.18 billion or $2.83 per share from $2.77 billion or $2.46 per share in the prior-year quarter. The increase was attributable to top-line growth.Quarterly non-GAAP net income came in at $3.83 billion or $3.41 per share compared with $3.1 billion or $2.75 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 48 cents.RevenuesOn a GAAP basis, total revenues in the fiscal first quarter were record high at $11.67 billion, up from $9.94 billion in the year-ago quarter. The quarterly revenues beat the consensus mark of $10.89 billion. Qualcomm registered record automotive revenues for the sixth consecutive quarter owing to solid momentum in the Snapdragon Digital Chassis platform. Strength within the handset and industrial Internet of Things (IoT) businesses also buoyed the top line.Segment ResultsQuarterly revenues from Qualcomm CDMA Technologies (QCT) were record high at $10.08 billion, up from $8.42 billion a year ago, as strength in the automotive platform and higher demand in handsets, along with normalization of channel inventory within the IoT business, aided the top-line growth. The company witnessed solid market traction in the EDGE networking business that helps transform connectivity in cars, business enterprises, homes, smart factories, next-generation PCs, wearables and tablets.Automotive revenues rose 61% to a record high of $961 million, driven by increased content in new vehicle launches with its Snapdragon Digital Chassis platform, with automakers deploying high-performance, low-power computing and connectivity chips to bring next-generation experience to consumers. Handset revenues jumped 13% to an all-time high of $7.57 billion, led by healthy traction in premium Android handsets. IoT revenues were up 36% to $1.55 billion on new product launches and channel inventory normalization. EBT margin for the QCT segment rose to 32% from 31%.Qualcomm Technology Licensing (QTL) revenues totaled $1.54 billion, up 5% year over year, as it remained the industry's most extensive licensing program of cellular essential patents. EBT margin improved to 75% from 74%.Cash Flow & LiquidityQualcomm generated $4.59 billion of net cash from operating activities in the first quarter of fiscal 2025 compared with $2.95 billion a year ago. As of Dec. 29, 2024, the company had $8.71 billion in cash and cash equivalents and $13.21 billion of long-term debt. The company repurchased 11 million shares for $1.8 billion during the quarter.Q2 GuidanceFor the second quarter of fiscal 2025, Qualcomm expects GAAP revenues of $10.3-$11.5 billion due to market stabilization, recovery in market demand and portfolio strength. Non-GAAP earnings are projected to be $2.70-$2.90 per share, while GAAP earnings are likely to be $2.38-$2.58 per share. Revenues from QTL are expected to be between $1.25 billion and $1.45 billion. For QCT, the company anticipates revenues between $8.9 billion and $9.5 billion, with 10% growth in handset revenues, about a 15% rise in IoT and a 50% improvement in automotive revenues.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed an upward trend in estimates review.VGM ScoresAt this time, Qualcomm has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Qualcomm has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerQualcomm belongs to the Zacks Electronics - Semiconductors industry. Another stock from the same industry, Infineon Technologies AG (IFNNY), has gained 1.1% over the past month. More than a month has passed since the company reported results for the quarter ended December 2024.Infineon Technologies reported revenues of $3.65 billion in the last reported quarter, representing a year-over-year change of -8.4%. EPS of $0.35 for the same period compares with $0.57 a year ago.Infineon Technologies is expected to post earnings of $0.32 per share for the current quarter, representing a year-over-year change of -30.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -3%.The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Infineon Technologies. Also, the stock has a VGM Score of D.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report QUALCOMM Incorporated (QCOM): Free Stock Analysis Report Infineon Technologies AG (IFNNY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks