Is It Too Late To Consider Buying QUALCOMM Incorporated (NASDAQ:QCOM)?

Today we're going to take a look at the well-established QUALCOMM Incorporated (NASDAQ:QCOM). The company's stock received a lot of attention from a substantial price increase on the NASDAQGS over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today I will analyse the most recent data on QUALCOMM’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for QUALCOMM

What Is QUALCOMM Worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 9.7% below my intrinsic value, which means if you buy QUALCOMM today, you’d be paying a fair price for it. And if you believe the company’s true value is $137.38, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since QUALCOMM’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from QUALCOMM?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a negative profit growth of -18% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for QUALCOMM. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Currently, QCOM appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on QCOM for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on QCOM should the price fluctuate below its true value.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example, QUALCOMM has 2 warning signs (and 1 which is potentially serious) we think you should know about.

If you are no longer interested in QUALCOMM, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.