Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 16.2%. Since the same quarter one year prior, revenues rose by 27.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- QCOM's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.66, which clearly demonstrates the ability to cover short-term cash needs.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 29.09% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, QCOM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- QUALCOMM INC has improved earnings per share by 19.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, QUALCOMM INC increased its bottom line by earning $2.71 versus $2.13 in the prior year. This year, the market expects an improvement in earnings ($3.64 versus $2.71).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Communications Equipment industry average. The net income increased by 16.6% when compared to the same quarter one year prior, going from $1,035.00 million to $1,207.00 million.
QUALCOMM Incorporated designs, develops, manufactures, and markets digital telecommunications products and services. The company has a P/E ratio of 21, above the average telecommunications industry P/E ratio of 18.1 and above the S&P 500 P/E ratio of 17.7. Qualcomm has a market cap of $104.67 billion and is part of the
industry. Shares are up 14.1% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.