Earnings Beat: QUALCOMM Incorporated Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Investors in QUALCOMM Incorporated (NASDAQ:QCOM) had a good week, as its shares rose 8.7% to close at US$180 following the release of its quarterly results. It looks like a credible result overall - although revenues of US$9.4b were in line with what the analysts predicted, QUALCOMM surprised by delivering a statutory profit of US$2.06 per share, a notable 13% above expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for QUALCOMM

After the latest results, the 29 analysts covering QUALCOMM are now predicting revenues of US$38.3b in 2024. If met, this would reflect a modest 5.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 10% to US$8.35. In the lead-up to this report, the analysts had been modelling revenues of US$38.1b and earnings per share (EPS) of US$8.02 in 2024. So the consensus seems to have become somewhat more optimistic on QUALCOMM's earnings potential following these results.

The consensus price target rose 5.3% to US$184, suggesting that higher earnings estimates flow through to the stock's valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic QUALCOMM analyst has a price target of US$255 per share, while the most pessimistic values it at US$140. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 11% growth on an annualised basis. That is in line with its 13% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 17% per year. So it's pretty clear that QUALCOMM is expected to grow slower than similar companies in the same industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around QUALCOMM's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on QUALCOMM. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for QUALCOMM going out to 2026, and you can see them free on our platform here..

You can also view our analysis of QUALCOMM's balance sheet, and whether we think QUALCOMM is carrying too much debt, for free on our platform here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.