QUALCOMM INC/DE (QCOM): what the price assumes
In the published model solve dated 2026-Q2, anchored at $164.52, QUALCOMM INC/DE (QCOM) is priced for +20.4% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-03.
Generated: 2026-08-30 · Source: https://boothcheck.com/report/QCOM
Headline
| Field | Value |
|---|---|
| Ticker | QCOM |
| Company | QUALCOMM INC/DE |
| Current price | $164.52/sh |
| Composition | QCT 87% / QTL 13% / QSI 0% / Nonreportable segments 0% / Unallocated revenues 0% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 11.0% |
| Operating margin today | 23.2% |
| Margin compression (value-band) | -12.2pp |
| Implied growth | 20.4% |
| Multiple paid | 18x operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 11.1% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | +0.30σ |
| cohort percentile (of 188 peers) | 23 |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.63x | 5 | expensive |
| Earnings | 1.68x | 4 | expensive |
| Relative | — | 0 | — |
| Growth | 1.00x | 3 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.6%); the inversion above states its own rate.
Per-Model Detail (n=12)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $164.18 | 1.00x | yes | FCF base $10.4B, growth 2% (input: historical growth), terminal g 1.9%, WACC 8.6%, 5yr projection |
| DCF Exit Multiple | Growth | $185.11 | 0.89x | yes | Exit EV/EBITDA: 15.3x / 17.3x / 19.3x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | — | — | no | P/E 28x (static sector reference · 2026-04), scenarios: 23.7x / 28.0x / 32.3x (bear / base = reference held flat / bull), EV/EBITDA 20x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $100.69 | 1.63x | yes | BV/sh $26.34, ROE (TTM) 35.4%, ke 9.3% |
| Two-Stage Excess Return | Asset | $210.82 | 0.78x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $135.01 | 1.22x | yes | Rev $44.1B, growth 2% (input: historical growth; tapered), Terminal P/S: 3.3x / 3.9x / 4.5x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $109.72 | 1.50x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $11.32B × (1−19%) / WACC 8.6% → EPV (no growth) |
| Residual Income | Asset | $157.11 | 1.05x | yes | BV $26.34 + 5yr PV of (ROE (TTM) 35.4% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $73.48 | 2.24x | yes | √(22.5 × EPS $9.11 × BVPS $26.34) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | EBITDA $10.61B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $97.02 | 1.70x | yes | FCF $10416.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $63.64 | 2.59x | yes | SBC-adj FCF $7.17B (FCF $10.42B − SBC $3.24B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $7.64 | 21.53x | yes | EPS $9.11 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $10.58 | 15.55x | yes | BV $26.34 × (ROIC 3.4% / WACC 8.6%) |
| P/Sales Sector | Relative | — | — | no | Revenue $44.07B × sector P/S 6.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $98.49 | 1.67x | yes | EPS $9.11 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| QCT (Qualcomm CDMA Technologies) | operating | enterprise | $38.4b | $11.7b operating-income | withheld | unresolved no unit value |
| QTL (Qualcomm Technology Licensing) | operating | enterprise | $5.6b | $4.0b operating-income | withheld | unresolved no unit value |
| QSI (Qualcomm Strategic Initiatives) | operating | enterprise | $0 | $180.0m operating-income | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $11.0b |
| Net debt / NOPAT (after-tax) | 1.32x |
| Net debt / operating income (pre-tax) | 1.08x |
| Interest coverage | 14.9x |
| Share count CAGR (buyback) | -1.5% |
| Burning cash | no |
Bullet Takeaways
At $227.29 (as of June 27, 2026) the market pays roughly 21x company-wide operating income, a level that needs operating profit to compound near 29% a year for five years. That is within the pace Qualcomm has recently hit; the stretch is in how long it must hold, not the starting speed.
The valuation methods split cleanly. The forward-growth family (perpetual-growth DCF near $299, exit-multiple DCF near $275) and the discounted future market cap near $210 reach today's price. The earnings-power and asset families do not: earnings power lands near $104, FCF-based value near $117, and book-anchored excess return near $105. The price is a bet on the growth lever, not on current earnings or book.
The business is profitable and well financed. Trailing operating income is about $11.4 billion, interest coverage is roughly 17x, net debt sits near $5.5 billion, and trailing ROE is about 38%. Cash quality is not the question here. The question is whether the non-handset businesses scale fast enough to outrun the Apple modem loss now scheduled to bite by 2027.
Bull Case
Look at the direction the numbers have been moving and the bull case writes itself in trajectory rather than in any single multiple. Q2 fiscal 2026 revenue came in around $10.6 billion with adjusted earnings of $2.65 a share, ahead of the roughly $2.56 the Street expected, and the stock moved up double digits on the print. The point is not the beat itself but where the growth is now coming from. Automotive revenue reached about $1.1 billion in the prior quarter, up roughly 15% year over year, and the internet-of-things line is running near $1.7 billion. The company has raised its fiscal 2029 non-handset revenue target to about $40 billion, close to double the prior goal. That is the lever the price is leaning on, and management is widening it rather than defending it.
The business still earns its keep on the licensing side, which is the highest-margin part of the company and the part least exposed to a single customer. Qualcomm's own filing is blunt about the chipset mix risk: it notes that Apple buys its thin-modem products, "which do not include our integrated application processor technology, and which have lower revenue and margin contributions than our combined modem and application processor products" (FY2025 10-K, accession 0000804328-25-000085). The licensing segment carries no such drag. It is the technology royalty stream that keeps the blended margin near 25% even as the handset chipset mix shifts, and it is why the operating-income lever the price depends on has room to work.
The forward-growth valuation methods agree with that read. Perpetual-growth DCF lands near $299 against a $227 price, the exit-multiple DCF near $275, and the discounted future market cap near $210, all built off about $44.5 billion of revenue and a free-cash-flow base near $12.8 billion. Relative valuation at a sector P/E lands near $249. When the methods that price the forward stream sit at or above the price while the company funds the transition from a balance sheet carrying about $9.8 billion in liquid assets and covering interest roughly 17 times over, the bet is coherent: pay for the diversification that is already showing up in the segment lines, financed by a business that does not need outside capital to get there.
Bear Case
The bear case is a question about what the price assumes, and the most fragile assumption is the one the company has already told you is coming. Apple is targeting a 2027 timeframe to replace Qualcomm's modem with its own silicon, and Qualcomm has publicly assumed near-zero Apple modem revenue by then. The 10-K names the structure of the problem directly: Apple's purchases are the lower-margin thin-modem products today, and the filing warns these shifts can "have an adverse effect on our revenues and margins" (FY2025 10-K, accession 0000804328-25-000085). The price needs roughly 29% annual operating-income growth for five years. Losing the single largest handset customer's modem volume inside that window is a direct subtraction from the very line the model is compounding.
The handset core is already softening underneath the diversification story. Recent results carried a roughly 13% decline in handset revenue, and quarterly guidance has flagged industry-wide memory supply constraints pressuring demand. So the bet is doubly loaded: the new businesses (automotive, IoT, the data-center push behind the roughly $2.3 billion Alphawave deal) must not only grow, they must grow fast enough to cover a shrinking handset base and an Apple cliff at the same time. About 87% of revenue still sits in the QCT chipset segment, so the cushion from licensing, real as it is, is only 13% of the top line.
The conservative valuation methods are the more honest read of what the price is underwriting. Earnings power value lands near $104, the FCF-yield method near $117, the share-based-compensation-adjusted FCF method near $86, and the book-anchored simple excess return near $105, all roughly half the current price. The model's own implied-value band runs from about $103 at the low to $150 at the base, with the current $227 sitting at the very top of the high case. Only about 28% of comparable fast-growers have sustained this pace for five years. Strip out the assumption that diversification offsets the Apple loss cleanly, and the price has little support beneath it from any method that values the business on what it earns today rather than on what it must earn next.
Valuation
The cleanest way to read the valuation is to invert it. At $227.29 the enterprise is priced at roughly 21x company-wide operating income, which solves to operating-profit growth of about 29% a year sustained for five years, at an 11.7% cost of capital with 4% terminal growth. Each one-point change in the cost of capital moves that implied growth rate about five points, so the headline figure is approximate, not a forecast. Against Qualcomm's own history the near-term pace is reachable; the demand is on duration.
The method families sort the price into its parts. The forward-growth family reaches it: perpetual-growth DCF near $299, exit-multiple DCF near $275, discounted future market cap near $210. The relative-multiple family sits just below at a sector P/E value near $249 and an EV/EBITDA value near $210. The earnings-power and asset families fall well short: earnings power value near $104, FCF yield near $117, simple excess return near $105, Graham number near $74. The blended central estimate that survives the method screen is about $249. The model's reasonable-growth band runs from roughly $103 low to $150 base, with the high case at $227.
Read together, the picture is consistent rather than contradictory. The growth methods say the price is fair if the diversification compounds; the earnings and asset methods say the price is expensive against what the business produces now. The gap between those two reads is exactly the Apple-replacement-versus-non-handset-ramp question. The balance sheet does not complicate the bet: net debt near $5.5 billion against trailing operating income of about $11.4 billion is a leverage ratio under one turn, and interest coverage near 17x means the financing of the transition is not in doubt.
Catalysts
Near-term catalysts cluster around the diversification proof points and the Apple timeline. Q2 fiscal 2026 results landed ahead of expectations (revenue near $10.6 billion, adjusted EPS of $2.65 versus about $2.56 expected), and the stock rose double digits on the print, so the next print's read on automotive and IoT momentum will matter for whether the market keeps crediting the non-handset story.
The single largest structural catalyst is the Apple modem transition, with Apple targeting a 2027 timeframe to move to its own silicon and Qualcomm already modeling near-zero Apple modem revenue by then. Watch each handset-revenue line and any change to that 2027 assumption.
On the growth side, management raised its fiscal 2029 non-handset revenue target to roughly $40 billion, nearly double the prior goal, and the roughly $2.3 billion Alphawave acquisition extends the push into data-center connectivity. Progress against that target, plus automotive's run rate near $1.1 billion a quarter (up about 15% year over year), are the markers that would justify the growth lever the price depends on. Industry-wide memory supply constraints flagged in recent guidance are the main near-term demand risk to track.
Sources: Qualcomm Q2 2026 earnings (heygotrade.com, investing.com), 24/7 Wall St., Seeking Alpha, The Motley Fool, TIKR.
Peer Cohorts (Per Segment, With Filing Citations)
QCT (Qualcomm CDMA Technologies) / QSI (Qualcomm Strategic Initiatives) (reported)
- AVGO (Broadcom Inc.)
- FY2025 10-K: …July 11, 2025, between the Company and Wilmington Trust, National Association, as trustee. 8-K 001-38449 4.2 07-11-2025 4.58 Form of 4.600% Senior Notes due 2030 (included in Exhibit 4.5 7 ). 8-K 001-38449 4.2 07-11-2025 4.59 Form of 4.900% Senior Notes due 2032 (included in Exhibit 4.5 7 ). 8-K 001-38449 4.2…
- FY2025 10-K: (included in Exhibit 4.2 0 ). 8-K 001-38449 4.1 05-21-2020 4.22 Form of 4.110% Senior Notes due 2028 (included in Exhibit 4.2 0 ). 8-K 001-38449 4.1 05-21-2020 4.23 Indenture, dated as of January 19, 2021, by and among the Company, the 2020 Guarantors and Wilmington Trust, National Association, as Trustee. 8-K…
- MRVL (MARVELL TECHNOLOGY, INC)
- FY2025 10-K: …foundry capacity with the appropriate technological capability; and • the number and nature of our competitors in a given market. Companies that compete directly with our businesses include, but are not limited to, Advanced Micro Devices, Inc. ("AMD"), Alchip Technologies ("Alchip"), Alphawave Semi ("Alphawave"),…
- FY2025 10-K: …are being used and adopted across the broad spectrum of vehicle types: internal combustion engine ("ICE") vehicles, battery electric vehicles ("BEVs"), plug-in hybrid electric vehicles ("PHEVs"), fuel cell electric vehicles ("FCEVs") and traditional hybrids ("HEVs"). 6 Table of Contents Fibre Channel Products Our…
- NXPI (NXP Semiconductors N.V.)
- FY2025 10-K: …was $1,584 million, an increase of $87 million or 5.8% versus the year ago period, with processors and mixed-signal products contributing to the growth. Revenue in the Communication Infrastructure & Other end market was $1,296 million, a decrease of $401 million or 23.6% versus the year ago period. The decline was…
- FY2025 10-K: …on Microelectronics and Communication Technologies ("IPCEI ME/CT") in multiple EU member states, the duration of which is planned to run until the end of 2029. The conditions to receive the IPCEI ME/CT government assistance include restrictions on eligible expenditures, employment retention, annual budget…
- QRVO (Qorvo, Inc.)
- FY2025 10-K: …maker ("CODM"). The CODM primarily uses segment operating income (loss) to evaluate each segment's performance and allocate resources. This measure is utilized during the budgeting and forecasting process to assess profitability and enable decision making regarding strategic initiatives, capital investments and…
- FY2025 10-K: "), Zigbee ® , Thread ® , Wi-Fi ® , cellular solutions for the Internet of Things ("IoT") and microelectromechanical system ("MEMS")-based sensors. ACG is a leading global supplier of advanced cellular solutions for smartphones, wearables, laptops, tablets and other devices. 4 Table of Contents Industry Trends,…
- SWKS (SKYWORKS SOLUTIONS, INC.)
- FY2025 10-K: …an acoustic wave for filtering and converted back into an electrical signal by a metal-piezo-metal vertical structure • IoT (Internet of Things): the interconnection of uniquely identifiable embedded computing devices within the existing internet infrastructure • LTE (Long-Term Evolution): 4th generation ("4G") radio…
- FY2025 10-K: …filed by us with the Securities and Exchange Commission ("SEC") in evaluating our forward-looking statements. We have no plans, and undertake no obligation, to revise or update our forward-looking statements to reflect any event or circumstance that may arise after the date of this report. We caution readers not to…
- MCHP (MICROCHIP TECHNOLOGY INCORPORATED)
- FY2025 10-K: …balances of the Company's receivables. Note 3 . Geographic and Segment Information The Company's business is made up of two operating segments, semiconductor products and technology licensing. These segments represent management's view of the business for which separate financial information is available and…
- FY2025 10-K: …the Company's manufacturing capabilities to help ensure the efficiency of the Company's operations and fulfillment of customer requirements. The technology licensing segment includes sales and licensing of the Company's intellectual property. The CODM uses segment gross profit for evaluating each segment's…
- MPWR (MONOLITHIC POWER SYSTEMS INC)
- FY2025 10-K: …of such products. We consider our primary competitors to include Analog Devices, Infineon Technologies, NXP Semiconductors, ON Semiconductor, Power Integrations, Renesas Electronics, ROHM Semiconductor, Semtech, STMicroelectronics and Texas Instruments. 9 Table of Contents We expect continued competition from…
- FY2025 10-K: …positioning through our technical sales and applications engineering efforts, we then sell our products to end customers primarily through third-party distributors and value-added resellers. Our third-party distributors are subject to distribution agreements with us, which allow the distributors to sell our products…
QTL (Qualcomm Technology Licensing) (reported)
- IDCC (INTERDIGITAL, INC.)
- FY2025 10-K: …Samsung, Apple, and vivo each comprised 10% or more of our consolidated revenue. Additional information regarding revenue concentrations is provided in this Annual Report in Note 4, " Segment and Concentration Information " in the Notes to Consolidated Financial Statements included in Part II, Item 8, of this Form…
- FY2025 10-K: …and base stations. The CE, IoT/Auto revenue grouping consists of consumer electronics and IoT products, such as televisions, laptops, gaming consoles, set-top boxes, streaming devices, and connected automobiles. We do not yet have revenue from Video Services but a Video Services grouping would consist of SVOD, AVOD,…
- RMBS (RAMBUS INC)
- FY2025 10-K: …reduced market share, a reduced number of licenses or may experience tightening of customers' operating budgets, difficulty or inability of our customers to pay our licensing fees, reduction in downstream demand, lengthening of the approval process for new products and licenses and consolidation among our customers.…
- FY2025 10-K: …by the customer to terminate for convenience, or upon certain other events, such as change of control, material breach, insolvency or bankruptcy proceedings. If we are unsuccessful in entering into license agreements with new customers or renewing license agreements with existing customers, on favorable terms or at…
- ARM (ARM)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.