Free Essay

Qcom Research Report

In: Business and Management

Submitted By pjtaylor
Words 797
Pages 4
Security Analysis
Whitcomb Valuation

Research Report
April 28, 2015

Qualcomm, Inc. (NYSE:QCOM)

Price: $69.23
Target Price: $80.00

Investment Thesis










EBITDA Margins















Market Data
52 Week High:
52 Week Low:
Market Cap. (MM):
Shares Out. (MM):
Avg. Daily Vol. :


Parris Taylor Erik Quesada Kinjal Shah Brendan Sehgal Price Performance


QCOM holds ~$30B in cash on its balance sheet. This gives it significant financial flexibility.
Dividend hikes and share buybacks are underway.
Share repurchases at prices below intrinsic value are value-creating.
QCOM’s strong patent portfolio in CDMA and
OFDMA allows its licensing model to continue to generate strong returns on capital. and is better positioned to participate in the rapidly accelerating adoption of 3G/4G technology.
Investors should expect increasing demand for the firm's chipsets and strong growth in 3G/4G smartphones around the world. While competition has been incoming for quite some time, it will be difficult for all but very few to compete with the breadth of the technology that Qualcomm currently offers. The secular trend toward robust smartphone adoption marches on, which should drive healthy long-term QTL revenue growth at 85%plus operating margins. We anticipate margin expansion over the next 3-5 quarters after effect of one time events subside.
QCOM has begun to extend technologies into adjacent categories. TAM for combination of automotive, IoT, Mobile Computing and Networking is expected to be ~5B+ in non-handset connected

Ticker: QCOM

Qualcomm, Inc.

April 28, 2015

Industry Outlook
Historically Qualcomm has enjoyed impressive growth on the back of the booming smartphone industry and this has resulted in higher royalty income. However, in the last few months of the current year its growth has slowed down to some extent due to a number of factors, including the increasing saturation rate of smartphones in the developed markets and comparatively weak demand of high-end smartphones in the emerging markets. The wireless network infrastructure market is in a phase of transition as mobile network operators seek to address increasing mobile traffic demands amidst global economic uncertainties. This paradigm shift is bringing new challenges and opportunities to infrastructure vendors. China, which is a big telecom market, is going through a shift from 3G towards 4G networks yet only 1 percent of customers are 4G subscribers. Also, China Mobile Ltd. the largest Chinese mobile operator, has decided to offer smartphones that will run on Qualcomm’s superfast 4G LTE (Long-Term Evolution) network. We expect Qualcomm to benefit considerably as the company boasts an extensive five-mode LTE chipset portfolio developed on its state-of-the-art baseband technology. The five-mode standard includes LTE, FDD-LTE, TD-SCDMA, WCD-

Porters 5 Forces
Threats to New Entry: High initial costs, intellectual property protection, maintaining competitive technology among competitors, Industry progressing at a rapid pace
Bargaining Power of Buyer: Dominated only by a small number of large players, buyers can pose backwards integration, buyers have significant leverage on the price since they buy in high volume
Bargaining Power of Suppliers: High number of suppliers dominated by small number of players, diffusion of risk over many companies keeps the bargaining power of one supplier to a minimum, switching costs very low Competition Between Firms: Highly competitive industry, always pressure to come up with something better, faster and cheaper

SWOT Analysis
Strengths: First mover advantage enables the customer concentration company to sustain market position, robust research and development capabilities, strong market position and robust growth across CDMA and licensing businesses
Weaknesses: Customer concentration
Opportunities: Strong outlook for global semiconductors market, robust growth in Chinese 4G LTE mobile handset market
Threats: Involvement in investigation related to alleged anti-monopoly practices, intense competition, rapid technological changes, reliance on limited number of third-party suppliers


Company Description
QUALCOMM Incorporated (Qualcomm) designs, manufactures and market digital communications products and services based on Code Division Multiple Access (CDMA), Orthogonal Frequency Division Multiple Access (OFDMA) and other technologies. The Company’s products consist of integrated circuits and system software used in mobile devices and in wireless networks. The Company operates in three segments, including
Qualcomm CDMA Technologies (QCT), Qualcomm Technology Licensing (QTL) and Qualcomm Strategic
Initiatives (QSI). QCT develops and supplies integrated circuits and system software based on CDMA, OFDMA and other technologies. QTL segment provides rights to use portions of its property portfolio. QSI seg-

Similar Documents

Premium Essay

Report 1

...Progress Report 1 * Which stocks did you invest in during this period? 1. Apple 2. Intel 3. Microsoft 4. International Business Machines 5. General Motors 6. Go Pro 7. AT&T INC. 8. Skyworks solutions 9. Cognizant Technology Solutions 10. CVS Caremark Corporation 11. Merck 12. Home Depot 13. Whirlpool Corporation 14. Vertex Pharmaceuticals Incorporated 15. Tata Motors 16. TreeHouse Foods 17. Amira Nature Foods 18. SAP AG 19. Infosys Sponsored American Deposit Receipt 20. Qualcomm Incorporated. * What are the weights you allocated to each stock and why?   In my stategy, I said that I am going to divide my total money into 4 part, 125,000 each. One for technology stock, one for consumer stocks, one using the value investing strategy and lastly, one for investing in bond. Since the beginning of the trading period I haven’t invested in any Bonds yet because I’m still trying to figure out which one to invest in. So far my weights for ever sector is as follows: Technology stocks (0.5937), Consumer Stocks (0.0217), Value Investing strategy (0.5096). I also calculated the individual weights for every stock against the total. The weights are as follows: Apple – 0.001920. I only bought 10 shares of AAPL because, even though the stock has been doing really good in the market, I’m still quite hesitant about it and I feel like it’s a risky......

Words: 4038 - Pages: 17

Premium Essay

Nokia's Bad Call on Smartphones

...Nokia designer Frank Nuovo says the company had prototypes that anticipated the iPhone. Dan Krauss for The Wall Street Journal "Oh my God," Mr. Nuovo says as he clicks through his old slides. "We had it completely nailed." Consumers never saw either device. The gadgets were casualties of a corporate culture that lavished funds on research but squandered opportunities to bring the innovations it produced to market. Nokia led the wireless revolution in the 1990s and set its sights on ushering the world into the era of smartphones. Now that the smartphone era has arrived, the company is racing to roll out competitive products as its stock price collapses and thousands of employees lose their jobs. This year, Nokia ended a 14-year-run as the world's largest maker of mobile phones, as rival Samsung Electronics Co. 005930.SE +0.67% took the top spot and makers of cheaper phones ate into Nokia's sales volumes. Nokia's share of mobile phone sales fell to 21% in the first quarter from 27% a year earlier, according to market data from IDC. Its share peaked at 40.4% at the end of 2007. Noting Nokia's History The impact was evident in Nokia's financial report for the first three months of the year. It...

Words: 2173 - Pages: 9

Free Essay


...OPTIONS FOR THE BEGINNER AND BEYOND In an increasingly competitive world, it is quality of thinking that gives an edge—an idea that opens new doors, a technique that solves a problem, or an insight that simply helps make sense of it all. We work with leading authors in the various arenas of business and finance to bring cutting-edge thinking and best-learning practices to a global market. It is our goal to create world-class print publications and electronic products that give readers knowledge and understanding that can then be applied, whether studying or at work. To find out more about our business products, you can visit us at OPTIONS FOR THE BEGINNER AND BEYOND UNLOCK THE OPPORTUNITIES AND MINIMIZE THE RISKS W. Edward Olmstead Professor of Applied Mathematics McCormick School of Engineering and Applied Sciences Northwestern University Editor for The Options Professor Published by Independent Investor, Inc. Vice President and Editor-in-Chief: Tim Moore Executive Editor: Jim Boyd Editorial Assistant: Susan Abraham Development Editor: Russ Hall Associate Editor-in-Chief and Director of Marketing: Amy Neidlinger Cover Designer: Chuti Prasertsith Managing Editor: Gina Kanouse Senior Project Editor: Kristy Hart Copy Editor: Keith Cline Senior Indexer: Cheryl Lenser Compositor: Interactive Composition Corporation Manufacturing Buyer: Dan Uhrig © 2006 by Pearson Education, Inc. Publishing as Financial Times Prentice......

Words: 65815 - Pages: 264

Premium Essay

Texas Instruments: Txn

...TEXAS INSTRUMENTS: TXN Texas Instruments: TXN Northeastern State University Table of Contents: Section I: Company History and Environment A.) Company Profile 3 References 8 Section II: Income Statement and Balance Sheet Analysis A.) Common Size Analysis (B.S. and I.S.) 10 B.) Identification & Explanation of Trends 11 References 12 Section III: Ratio Analysis A.) Ratio Profile 13 References 14 B.) Ratio Table for TXN and Peers 15 C.) Ratio Trends and Comparisons 16 Section IV: Valuation A.) Reformulated Balance Sheet 18 B.) Market Value of TXN Stock (ROPI) 19 C.) Spreadsheet Calculations 20 D.) Assumptions 21 E.) Estimate Price to Forecast Price 22 Section V: Summary and Conclusion A.) Summary 23 B.) Company Financial Appearance 24 References 25 Texas Instruments: TXN ) Company History and Environment Company History: Texas Instruments (TI) is a designer and manufacturer of microcontroller semiconductors and two forms of signal processing, analog and digital. It all began when Eugene McDermott, John Erik Jonsson, Patrick Eugene Haggerty, and Cecil H Green founded Texas Instruments in 1930. The company was originally named Geophysical Science, GSI, later it was changed to Coronado Corporation in 1939 before it was finally named Texas Instruments Incorporated in 1951 (History of Innovation). The founders of Texas......

Words: 5487 - Pages: 22

Free Essay


...CAPITALIZATION Master of Business Administration Master Business Administration for Executive (Chiang Mai) Faculty of Business Administration Chiang Mai University March, 2012 Facebook’s Capitalization Report by Thanassorn Boontarika Pinnarat Sathit Saowaluk Hathairat Ratanasirisap Pongpaew Suriyachot Chobpimai Sangkuan Yosdech Code Code Code Code Code Code 541532126 541532137 541532142 541532155 541532164 541532176 Report to Dr. Chaiwuth Tangsomchai Course work 702711 Financial Management) Master of Business Administration for Executive(Chiang Mai) Business Administration Chiang Mai University March, 2012 - - Index - Page Chapter I Introduction & Objective 1.1 Introduction 1.2 Objectives Chapter II Company 2.1 Facebook, Inc. Profile 2.2 The Corporate Mission 2.3 Executive Officer and director 2.4 Facebook’s Shareholder 2.5 Facebook Milestone 2.6 Facebook Business 2.7 Competition 2.8 Revenues Stream 2.9 Facebook Market Opportunities 2.10 Facebook Strategy 2.11 Summary of Risk Factor Chapter III Facebook Financial Report 3.1 Consolidated Balance Sheets 3.2 Consolidated Statement of Income 3.3 Basic Earning Per Share 3.4 Pro-forma Earning Per Share 3.5 Consolidated Statement of Cash Flow 3.6 Consolidated Statement of Stockholder’s Equity 3.7 Dividend Policy Chapter IV Facebook Initial Public Offerings(IPOs) 4.1 IPOs Advantage 4.2 Preparing to go to Public 4.3 Facebook IPOs 4.4 Facebook IPOs Underwriting Company 4.5 Facebook IPOs Counsel Company 4.6......

Words: 7183 - Pages: 29

Free Essay

Ratio Analysis

...MORGAN NORTH STANLEY RESEARCH AMERICA Morgan Stanley & Co. LLC Adam S. Parker, Ph.D +1 212 761 1755 Brian T. Hayes, Ph.D Antonio Ortega November 26, 2012 Adam J. Gould, CFA US Equity Strategy The 2013 Playbook We are launching our 2013 US equity outlook today. We have been cautious on US equities for much of the last two years. Our concerns around US deficit / debt and the obvious borrowing from the future that occurs from unconventional policy, the European sovereign crisis, and slower growth in emerging markets generally remain, but the acuteness of these issues appears for now to be less sharp. Our 2013 year-end target calls for low-to-mid single digit upside (Exhibit 1) predicated on our view that 2014 corporate earnings are likely to modestly recover from our 2013 forecasted level, perhaps with profits troughing during the April 2013 earnings season. Our year-end 2013 S&P500 price target is 1434, and our bull and bear targets are 1733 and 1135 (Exhibit 1). Our EPS outlook for 2014 is $110.21, up from our 2013 forecast of $98.71, both well below consensus. Improving Michigan Confidence and tightening corporate spreads drive the relative improvement in our earnings outlook. Please see our Interactive Model: S&P500: 2013 Year-End Forecast, also published today, to play with key assumptions and change assumptions for......

Words: 21028 - Pages: 85

Premium Essay

About Nokia in China

...BUSINESS ORGANIZATION MANAGEMENT NOKIA NAME: SHALINI DEVI A/P MANOHARAN ID NUM: DCA 07-04101148 LEC NAME: MR SELVAMATHAN SUBMISSION DATE: 28 MAY 2012 TABLE OF CONTENT INTODUCTION Nokia is a multinational corporation engaged in the manufacturing of mobile phones devices, in converging internet and communication industries, having about 132,000 employees working worldwide. The organization is the World’s largest mobile manufacturing company and is operational is 150 different countries having an approximate global annual sales revenue of ¼ 42 billion and operating profit of ¼ 2 billion in the preceding year 2010. The organization has a market share of about 28.9% as of the preceding year 2010 and is still the market leader in the world of mobile phones. Nokia Corporation has a history of 146 years and it wasn't the way it is today, it took Nokia decades to reach at this point. The first Nokia century began with Fredrik Ides tam’s paper mill on the banks of the Nokian virtual River. Between 1865 and 1967, the company would become a major industrial force, but it took a merger with a cable company and a rubber firm to set the new Nokia Corporation on the path to electronics. From 1968-91, the newly formed Nokia Corporation was ideally positioned for a pioneering role in the early evolution of mobile communications. As European telecommunications markets were deregulated and mobile networks became global, Nokia led the way with some iconic products. In 1992, Nokia......

Words: 19174 - Pages: 77