Qualcomm Q4 Earnings Preview: It's Snapdragon Vs. China's Apple Dynamics

Wireless telecommunication and semiconductor player Qualcomm Inc QCOM is set to report its fourth-quarter earnings after market close on Nov. 1.

Qualcomm is well known for its innovations that have had a significant impact on the development of smartphones, mobile communication, and wireless connectivity. The company continues to play a crucial role in the development of 5G infrastructure, which promises faster and more reliable wireless connectivity for various applications.

Q4 Analysts’ Focus: Analysts will be keeping a close eye on inventories, orders and shipments with the holiday season right around the corner. Revenues and margins at Qualcomm have been declining over the past year, so analysts will be eagerly awaiting management’s outlook.

Analysts will also be watching the company’s revenue diversification initiatives. Accordingly, QCOM’s revenue from relatively newer segments of the business such as Internet of Things and Automotive will be of particular interest.

Investors in the stock are positive about the company’s latest Snapdragon X Elite and new Snapdragon smartphone chipset. It remains to be seen how these contribute to the bottom line.

On the other hand, China developments remain a risk. Apple Inc AAPL continues to be Qualcomm’s largest customer. The company is one of the top part suppliers to the iPhone. As things get more challenging for Apple in China, Qualcomm may be impacted as well.

Related: Apple Faces Headwinds In China: iPhone Sales Down As Huawei Thrives

Ratings & Consensus Estimates: For the fourth quarter, Wall Street analysts are expecting Qualcomm to report $1.8 in EPS and $8.03 billion in revenue. For the fiscal year ending September 2023, the company is expected to report $8.30 in EPS and $35.69 billion in revenue.

Reports from 32 analysts over the last 90 days rate the stock a Buy with an average consensus price target of $136.87.

Over the past two months, we've seen most sell-side analysts reiterating or maintaining their rating on Qualcomm. Christopher Rolland of Susquehanna maintains a Positive rating with a price target of $130 while Kevin Cassidy of Rosenblatt and John Vinh of Keybanc both have a price target of $145 on the stock.

Read Also: QUALCOMM Likely To Report Lower Q4 Earnings; Here’s A Look At Recent Price Target Changes By The Most Accurate Analysts

Price Action: Qualcomm’s stock has largely been range bound between $105 and $113 over the past month, and was trading 0.7% higher at $109.79 at the time of publication Wednesday.

Read Next: Bill Gross Sees ‘Extraordinary Long-Term Value’ in Regional Banks: 3 ETFs To Watch

Photo: Shutterstock