QCOM Stock Cuts Costs as Q4 Report is Near, What’s Next?

Qualcomm Incorporated (NASDAQ: QCOM) announced that it will be releasing the results for Q4 and fiscal 2023 on November 3rd, 2023. The company will release its financial results for the last quarter and the whole year after the market closes on that day.

Moreover, in an attempt to increase profitability, Qualcomm is cutting jobs in California. This will result in over 1,200 job losses which equates to about 10% of their workforce. This move is a part of their plan to cut operating costs and generate more revenue. When compared to others in its market, QCOM stock has a low valuation but a strong presence in the 5G sector.

Therefore, investors may react differently to news about QCOM shares depending on how they perceive it. If the earnings report shows positive results. it will demonstrate the company’s ability to generate revenue and cash flow along with its leadership in the 5G sector. This could boost investor confidence and demand making QCOM shares pricier. 

But layoffs signal a challenge that doesn’t bode well for business operations and maintaining margins plus growth. With signs like these, investor’s confidence may go down along with the demand and price for QCOM shares.

What is Qualcomm Inc. and How Does it Operate?

Qualcomm Inc. manufactures technology and products for mobile devices and wireless products. It has three separate divisions: Qualcomm CDMA Technologies (QCT), Qualcomm Technology Licensing (QTL), and Qualcomm Strategic Initiatives (QSI).

The QCT creates and supplies integrated circuits. There is also a system software based on technology used in voice and data communications, multimedia, networking, application processing, and GPS products. 

With QTL, they grant licenses to use parts of their intellectual property portfolio. Finally, QSI is about expanding the opportunities they get with their technology. They also support new product designs and services for voice and data communications. 

Who Owns Qualcomm and What is its History?

As per Simply Wall St., the ownership breakdown highlights that 74.1% are owned by institutions, 25.8% are owned by the General Public, individual insiders hold 0.07% and private companies hold 0.002%.

The top shareholder of the QCOM stock is The Vanguard Group Inc. and they own 9.88% of the company and hold the title of major shareholder in the stock.

It was founded in July 1985 by Franklin P. Antonio, Adelia A. Coffman, Andrew Cohen, Klein Gilhousen, Irwin Mark Jacobs, Andrew J. Viterbi, and Harvey P. White in San Diego, California.

QCOM Stock Financial Summary

QCOM Stock Last Reported Results 

Qualcomm reported revenue of $8.45 Billion in the last reported quarter, representing a year-over-year change of -22.8%. The EPS was $1.87 for the same period compared to $2.96, a year ago.

Compared to the Consensus Estimate of $8.51 Billion, the reported revenue surprise is -0.77%. The surprise per share was +3.51%.

Over the past four quarters, Qualcomm has beaten consensus EPS estimates three times and the revenue two times.

QCOM Stock Earnings Estimate Revision

If a company’s earnings estimates increase, the fair value of its stock will increase. A higher fair value than the current market price leads to investor interest in buying the stock, which causes its price to move higher.

Qualcomm is expected to post earnings of $1.91 per share for the current quarter, representing a year-over-year change of -38.9%. The current fiscal year’s consensus earnings estimate of $8.31 suggests a year-over-year change of -33.6%.

For the next fiscal year 2024, the consensus estimate for earnings of $9.18 suggests a change of +10.4% from what Qualcomm is expected to report in 2023.

QCOM Stock Revenue Growth Forecast

While a company’s earnings growth is probably one of the ideal ways to dig deep and analyze its financial health, nothing positive would happen if it can’t grow its sales. It would be difficult for a company to grow its earnings without growing its revenue over the long term. Knowing the company’s potential revenue growth is therefore essential.

For Qualcomm, the current quarter’s consensus revenue estimate of $8.55 Billion suggests a year-over-year change of -25%. For the current and next fiscal years, estimates of $35.69 Billion and $37.51 Billion indicate changes of -19.10% and +5.10%, respectively.

QCOM Stock Price Evaluation

According to Qualcomm Incorporated (NASDAQ: QCOM) price action on the chart, the stock price has been rising since March 2020 when QCOM rallied from the $58 support level. 

The stock followed an upward parallel channel, made higher highs and lows, and reached $193 in February 2022. But at the high, it faced resistance as investors took profit booking and the price slid and formed support around $100 by breaking out of the parallel channel. 

Afterward, for an entire year, the stock spent almost a year in consolidation, narrowing the trading range. At press time, the current market price is $105.62, and it is trading at the important support level.

Therefore, if buyers boost more, the QCOM stock might surge strongly from the current level and surge above. The possible targets would be between $120 and $130. On the contrary, if QCOM share fails to hold its grip and continuously declines and breaches below $100, it may hit $90.

The current value of RSI is at 37.82 points. The 14 SMA is above the median line at 46.60 points which indicates that the QCOM stock is bearish.

The MACD line at 1.14 and the signal line at 0.65 are above the zero line. A bearish crossover is observed in the MACD indicator which signals weakness in the momentum of the stock price.

Summary

The price action and technical analysis tools of QCOM stock are highlighting a bearish outlook for the upcoming sessions. Since the company is laying off its employees, there is a higher probability that investors may react differently to news about QCOM shares depending on how they perceive it.

Technical Levels

Support Levels: $100 and $90

Resistance Levels: $120 and $130

Disclaimer

In this article, the views, and opinions stated by the author, or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.

Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.

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