QCOM

We rate QUALCOMM INC/DE (QCOM) as a Hold with a composite score of 59.2/100 at a current price of $144.71. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in value (90th percentile) and quality (89th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (34th percentile) and momentum (35th percentile) tempers our overall conviction. We assign a Wide Moat rating (72/100), Medium uncertainty, and Exemplary capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

QUALCOMM INC/DE holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 59.2/100 places it at rank #763 in our full 7,333-stock universe. With a $182.6B market capitalization, QUALCOMM INC/DE operates at meaningful scale within the Manufacturing sector, providing competitive advantages in distribution, procurement, and customer reach.

Revenue is growing at 30%, though momentum at the 35th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 55% (+12.7pp vs sector) narrow to operating margins of 28% (+27.0pp vs sector) and net margins of 25.8%, yielding a gross-to-net conversion rate of 47%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $144.71, QUALCOMM INC/DE appears undervalued relative to its fundamentals. Our value factor score of 90/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 13.1x (a 41% discount to the sector median of 22.3x), EV/EBITDA of 13.1x (near the sector median), P/B of 6.6x, P/S of 3.4x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Medium uncertainty rating to QUALCOMM INC/DE. The stock presents a balanced risk profile: elevated market sensitivity (beta of 1.48). While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 1.48). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 66th percentile and quality factor at the 89th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 55% provide a buffer against cost pressures; above-average stability (66th percentile) suggests predictable business dynamics; large-cap scale ($182.6B) provides resilience. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate QUALCOMM INC/DE's capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 50.5%, a 2.06% dividend yield, best-in-class net margins of 25.8%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — QUALCOMM INC/DE meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 2.06% dividend yield, and the combination of 22.0% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, QUALCOMM INC/DE receives a Hold rating with a composite score of 59.2/100 (rank #763 of 7,333). Our quantitative framework assigns a Wide Moat (72/100, trend: stable), Medium uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 63/100.

Our analysis supports a neutral stance on QUALCOMM INC/DE. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.