How are energy investors positioned?
Investing.com - Benchmark maintained its Buy rating and $200.00 price target on Qualcomm (NASDAQ:QCOM) despite the stock’s weakness in after-hours trading. According to InvestingPro data, the stock trades at an attractive PEG ratio of 0.49, suggesting undervaluation relative to its growth prospects.
The research firm described Qualcomm’s recent quarterly performance as "very clean," with growth across all major business categories. This performance contributed to the company’s impressive 16.15% year-over-year revenue growth and maintains its strong financial health score of "GOOD" on InvestingPro. Automotive revenue grew 21% annually, while Internet of Things (IoT) increased by 24%, and the Handsets division managed 7% growth driven by demand for the Snapdragon 8 Elite platform in premium-tier devices.
Benchmark noted that investor concerns about the long-term financial impact of losing Apple (NASDAQ:AAPL)’s business have contributed to Qualcomm’s recent weakness. The firm believes Qualcomm has communicated this issue effectively to investors, giving them sufficient opportunity to factor this development into their models and valuations.
During this transition period, Qualcomm has aggressively pursued diversification strategies, with its Automotive division now contributing $1 billion quarterly and IoT reaching almost $1.7 billion in revenue.
The after-hours weakness in Qualcomm shares likely stemmed from investor disappointment that the company’s earnings per share (EPS) guidance mid-point only matched Street estimates rather than exceeding them.
In other recent news, Qualcomm reported its fiscal third-quarter 2025 earnings, surpassing analyst expectations with earnings per share (EPS) of $2.77 compared to the forecast of $2.71. The company achieved revenues of $10.37 billion, slightly exceeding the anticipated $10.33 billion. Management has raised guidance for the September quarter, projecting revenues of $10.7 billion and an EPS of $2.85, which are ahead of analyst expectations. Cantor Fitzgerald maintained a Neutral rating on Qualcomm, reiterating a $150 price target following the earnings report. Meanwhile, Mizuho (NYSE:MFG) adjusted its price target for Qualcomm to $185 from $190, citing concerns over Qualcomm CDMA Technologies (QCT) margins, although it maintained an Outperform rating. These recent developments highlight the company’s financial performance and the varied analyst perspectives on its future prospects.
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