On Mar 31, Zacks Investment Research upgraded QUALCOMM Incorporated QCOM to a Zacks Rank #2 (Buy) from a Zacks Rank #4 (Sell).
The company leads the global mobile baseband chipset market. Qualcomm’s latest chipsets for WiFi, RF360, multimode 3G and 4G LTE from its flagship Snapdragon platform have been doing pretty well. Moreover, consistent smartphone growth, especially in the emerging countries, bodes well for the company’s long-term growth prospects.
Meanwhile, the company’s management raised its fiscal 2015 financial outlook for total revenue and non-GAAP EPS. Notably, the raised guidance came on the heels of the NDRC settlement news. The current guidance for total revenue stands within the range of $26.3–$28 billion compared with the prior outlook of $26–$28 billion. Non-GAAP EPS is now expected in the band of $4.85–$5.05 against the prior projection of $4.75-$5.05.
Qualcomm has also announced a share buyback program wherein the company will purchase up to $15 billion worth of shares. The company has also hiked its quarterly dividend by 14.3% to 48 cents from 42 cents per share. This brings the yearly dividend figure to $1.92 per share.
Notably, Qualcomm reported strong financial results in the first quarter of fiscal 2015. Both the top and the bottom line steered past the respective Zacks Consensus Estimate. In the reported quarter, the company achieved record high revenues, adjusted operating income and shipment of MSM chipsets.
In addition, Qualcomm’s trailing four-quarter average earnings surprise stands at a positive 9.54%.
Also, upward estimate revisions reflect optimism regarding the stock’s prospects. The Zacks Consensus Estimate for 2015 and 2016 has moved north by 1.4% and 3.3% to $4.42 and $4.72 per share, respectively, over the last 60 days.
Other Stocks to Consider
Investors interested in the same industry may also consider stocks like InterDigital, Inc. IDCC, ViaSat Inc. VSAT and Aruba Networks, Inc. ARUN. While InterDigital and ViaSat sport a Zacks Rank #1 (Strong Buy), Aruba Networks has the same Zacks Rank as Qualcomm.
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