Qualcomm's (QCOM, Financial) Snapdragon 801 chipset, which will support multiple products offered by various clients such as Samsung (SSNLF, Financial) Galaxy S5, the new HTC One M8 and the Sony (SNE, Financial) Xperia Z2 smartphones and tablet should help the company to acquire additional share in the market across the world.
Apart from this, the company has already announced several new products in its roadmap that will strengthen its position as it plans to bring 3G LTE modems and 64-bit CPU architectures across multiple product tiers. In addition, the chip giant also plans to launch fourth-generation multimode 3G/4G modem products based on its Snapdragon 805 that will feature Cat 6 LTE in the current quarter that will further enhance its overall profitability.
A strong product lineup will drive growth
Also, the company has witnessed strong momentum of Snapdragon-based devices globally which is growing at a healthy pace and attracting many customers. The company has more than 525 designs in the pipeline in Snapdragon chipset solution and it expects more than half of its MSM chip shipments to be integrated with LTE-enabled platforms that should certainly drive its growth in the future.
For the current quarter, Qualcomm expects revenue between $6.2 billion and $6.8 billion and adjusted earnings of $1.15 to $1.25 per share, which below the analyst’s expectations of the midpoints of both measures. Analysts have predicted revenue of $6.60 billion and earnings of $1.25 per share for the third quarter.
As it looks forward its long-term growth drivers remain intact and should boost its overall performance and sales. The company currently trades at the trailing P/E of 19.87 and forward P/E of 13.75 states that it shares potential valuation for the company and offers a lot of room in the future to grow.
Conclusion
Qualcomm has solid operating margin of 29.38%, with profit margin of 26.90% looks pretty good for investment. The company has total debt outstanding of 12.00 million, well mixed by most measures. Besides, the analysts have predicted CAGR of 15.00% for the next five years which is a healthy growth for the chip giant and investors can count on picking the stock for their portfolio as it heads towards a long term growth.
