In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Qualcomm QCOM alongside its primary competitors in the Semiconductors & Semiconductor Equipment industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to investors and shed light on company's performance within the industry.
Qualcomm Background
Qualcomm develops and licenses wireless technology and designs chips for smartphones. The company's key patents revolve around CDMA and OFDMA technologies, which are standards in wireless communications that are the backbone of all 3G, 4G, and 5G networks. Qualcomm's IP is licensed by virtually all wireless device makers. The firm is also the world's largest wireless chip vendor, supplying nearly every premier handset maker with leading-edge processors. Qualcomm also sells RF-front end modules into smartphones, as well as chips into automotive and Internet of Things markets.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Qualcomm Inc | 20.93 | 7.39 | 4.95 | 8.67% | $2.87 | $5.22 | 11.15% |
| NVIDIA Corp | 50.28 | 45.23 | 27.73 | 30.94% | $19.71 | $22.57 | 122.4% |
| Taiwan Semiconductor Manufacturing Co Ltd | 29.02 | 7.17 | 11.15 | 6.67% | $474.12 | $358.12 | 40.07% |
| Broadcom Inc | 123.74 | 10.84 | 15.14 | 3.02% | $5.58 | $7.78 | 42.99% |
| Advanced Micro Devices Inc | 166.01 | 3.99 | 9.81 | 0.47% | $1.12 | $2.86 | 8.88% |
| Texas Instruments Inc | 34.94 | 10.69 | 11.49 | 6.59% | $1.76 | $2.21 | -15.65% |
| ARM Holdings PLC | 304.44 | 22.79 | 36.91 | 4.07% | $0.23 | $0.91 | 39.11% |
| Analog Devices Inc | 65.98 | 3.09 | 11.27 | 1.11% | $1.04 | $1.31 | -24.84% |
| Intel Corp | 80.83 | 0.72 | 1.50 | -1.46% | $0.86 | $4.55 | -0.9% |
| Microchip Technology Inc | 30.58 | 6.43 | 6.36 | 1.98% | $0.41 | $0.74 | -45.76% |
| Monolithic Power Systems Inc | 100.28 | 18.70 | 21.74 | 4.66% | $0.13 | $0.28 | 15.03% |
| ON Semiconductor Corp | 16.01 | 3.61 | 3.97 | 4.11% | $0.58 | $0.78 | -17.15% |
| STMicroelectronics NV | 7.76 | 1.49 | 1.81 | 3.51% | $1.31 | $1.15 | -25.29% |
| First Solar Inc | 19.18 | 3.17 | 6.13 | 4.94% | $0.48 | $0.5 | 24.65% |
| GLOBALFOUNDRIES Inc | 28.28 | 2.02 | 3.34 | 1.38% | $0.56 | $0.4 | -11.54% |
| United Microelectronics Corp | 12.84 | 1.91 | 3 | 3.76% | $27.9 | $19.98 | 0.89% |
| ASE Technology Holding Co Ltd | 18.51 | 2.11 | 1.10 | 2.62% | $26.08 | $23.07 | 2.91% |
| Skyworks Solutions Inc | 20.95 | 2.56 | 3.74 | 1.9% | $0.25 | $0.36 | -15.47% |
| Universal Display Corp | 40.20 | 5.82 | 14.32 | 3.47% | $0.07 | $0.12 | 8.15% |
| Cirrus Logic Inc | 25.71 | 4 | 4.18 | 2.3% | $0.07 | $0.19 | 17.98% |
| MACOM Technology Solutions Holdings Inc | 100.06 | 6.62 | 10.63 | 1.88% | $0.04 | $0.1 | 28.25% |
| Lattice Semiconductor Corp | 31.54 | 8.46 | 9.50 | 3.28% | $0.04 | $0.08 | -34.72% |
| Average | 62.24 | 8.16 | 10.23 | 4.34% | $26.78 | $21.34 | 7.62% |
By conducting a comprehensive analysis of Qualcomm, the following trends become evident:
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With a Price to Earnings ratio of 20.93, which is 0.34x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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The current Price to Book ratio of 7.39, which is 0.91x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 4.95, which is 0.48x the industry average.
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The Return on Equity (ROE) of 8.67% is 4.33% above the industry average, highlighting efficient use of equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $2.87 Billion is 0.11x below the industry average, suggesting potential lower profitability or financial challenges.
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With lower gross profit of $5.22 Billion, which indicates 0.24x below the industry average, the company may experience lower revenue after accounting for production costs.
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The company's revenue growth of 11.15% exceeds the industry average of 7.62%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
By considering the Debt-to-Equity ratio, Qualcomm can be compared to its top 4 peers, leading to the following observations:
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In the context of the debt-to-equity ratio, Qualcomm holds a middle position among its top 4 peers.
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This indicates a moderate level of debt relative to its equity with a debt-to-equity ratio of 0.59, which implies a relatively balanced financial structure with a reasonable debt-equity mix.
Key Takeaways
For Qualcomm, the PE, PB, and PS ratios are all low compared to industry peers, indicating potential undervaluation. On the other hand, Qualcomm's high ROE and revenue growth, along with low EBITDA and gross profit, suggest strong profitability and growth prospects relative to competitors in the Semiconductors & Semiconductor Equipment industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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