Here's What The Buy Side Expects From Qualcomm

| About: Qualcomm Inc. (QCOM)

Qualcomm Inc. (NASDAQ:QCOM) is set to report FQ1 2014 earnings on Wednesday, January 29th. Qualcomm is an American global semiconductor company that produces and designs products and services for telecommunications devices, including high end smart phones. Products include Snapdragon mobile phone processors, IZAT location service devices, and Gobi 3G and 4G LTE modems for internet connectivity. Some analysts are concerned that the growth rate of the high end cell phone market may be slowing as the market becomes saturated. One of Qualcomm’s biggest customers, Samsung (OTC:SSNGY), reported worse than expected December handset sales which could spell trouble for Qualcomm this quarter. Qualcomm’s report on Wednesday should give investors a better understanding of the state of the upscale mobile phone industry. Here’s what the analysts are expecting from Qualcomm.

The information below is derived from data submitted to the platform by a set of Buy Side and Independent analyst contributors.image

The current Wall Street consensus expectation is for Qualcomm to report $1.20 EPS and $6.693B revenue, while the current consensus from 33 Buy Side and Independent contributing analysts is $1.23 EPS and $6.690B revenue. This quarter the buy-side as represented by the community is expecting Qualcomm to beat the Street on profit but come up slightly short on revenue.

The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case we are seeing an average differential between the 2 groups’ forecasts.

By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non professional investors Estimize has created a data set that is up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market’s actual expectations. It has been confirmed by an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus.


The distribution of estimates published by analysts on the platform range from $1.17 to $1.30 EPS and $6.433B to $6.900B in revenues. This quarter we’re seeing a moderate distribution of estimates compared to previous quarters.

The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wider distribution of estimates signaling less agreement in the market, which could mean greater volatility post earnings.image

This quarter the Wall Street EPS consensus fell from $1.30 to $1.20 while the Estimize consensus also declined from $1.27 to $1.23. Wall Street revenue expectations dropped from $7.019B to $6.693B and the Estimize revenue forecast inched higher from $6.686B to $6.690B. Timeliness is correlated with accuracy and in this case both groups are expecting very similar revenue numbers at the end of the quarter.image

The analyst with the highest estimate confidence rating this quarter is anmikyoso who projects $1.26 EPS and $6.737B in revenue. In the Winter 2014 season, anmikyoso is rated as the 32nd best analyst and is ranked 31st overall among over 3,600 contributing analysts. Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case the analyst with the highest rated estimate is making a bullish call predicting that Qualcomm will beat the Street on both profit and revenue.

Disclosure: None