Stellar revenue growth helped Qualcomm return 2x market returns

Qualcomm Inc. (NASDAQ: QCOM) the stock price has increased more than 2.3 times from $57 at the end of 2018 to more than $132 currently, mainly due to the favorable development of its sales. During this period, the company experienced a dramatic 74% increase in revenue and, combined with a higher P/S multiple and a substantial decline in the number of shares outstanding, the stock price of society recovered. Moreover, over the same period, the S&P 500 returned around 65%, which means that Qualcomm
COMQ
the stock has managed to post double those returns since the end of 2018.

In our interactive dashboard, Why was Qualcomm’s stock moved: QCOM stock has gained 132% since 2018we break down the factors driving this movement.

Qualcomm’s total revenue increased 74% from $22.6 billion in fiscal year 2018 to $39.2 billion on an LTM basis

  • Qualcomm’s total revenue has been roughly flat around $22 billion to $24 billion between fiscal year 2018 and fiscal year 2020 (Qualcomm’s fiscal year ends in September).
  • However, sales took off in fiscal 2021, reaching $33.6 billion, as the accelerated rollout of 5G drove up both sales volumes and the average selling price.
  • Sales growth continued in FY22 and LTM sales currently stand at nearly $40 billion.
  • Equipment and services revenue make up the bulk of Qualcomm’s sales, accounting for nearly 80% of the company’s total revenue at $26.7 billion as of FY21.
  • For more details on Qualcomm’s revenue and comparison with its peers, see Qualcomm revenue comparison

Earnings per share increased 126% from $15.44 in 2018 to $34.93 currently

  • Qualcomm’s revenue has fallen from $22.6 billion in 2018 to $39.3 billion currently, while the number of shares outstanding has shrunk at a rapid pace, from 1.5 billion in 2018 to around 1.1 billion currently.
  • Because of this, the RPS has gone from $15.44 in fiscal year 2018 to $34.93 currently.

The price-to-sales (P/S) multiple for Qualcomm rose sharply from 2.9x in 2018 to 7.5x at the end of 2020, but fell back to 3.8x currently, still around 1.3x higher than its 2018 level

  • Qualcomm’s P/S multiple rose sharply to around 7.5x at the end of 2020, driven by rising investor expectations for increased chipset sales and licensing revenue.
  • However, due to ongoing geopolitical tensions and heightened economic uncertainty weighing on broader markets, the P/S multiple has retreated, currently standing at around 3.8x.
  • For more details on the company’s stock returns and comparison with its peers, see Comparison of Qualcomm stock returns.

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