Bulls Confident Despite Qualcomm's Post-Earnings History

Will the chip stock narrow its nine-month lead?

Digital Content Manager
Jan 30, 2024 at 3:31 PM
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Tech earnings are the talk of the town this week, and semiconductor concern Qualcomm Inc (NASDAQ:QCOM) is slated to take its turn in the confessional after tomorrow's close, when it announces first-quarter results. The equity was last seen down 2.5% at $145.97, cooling off from its Jan. 25, 52-week high of $157.98, and added 25.6% in the last nine months.

QCOM Intraday

That lead could narrow after Qualcomm's quarterly report, however, as the security has a dismal history of post-earnings reactions. QCOM finished six of the past eight next-day sessions lower, including an 8.2% drop in August. The shares averaged a move of 5.9% in the past two years, regardless of direction, but the options pits are pricing in a larger-than-usual swing of 8.9% this time. 

Nevertheless, the options pits appear to see no signs of trouble, as indicated per the security's 50-day call/put volume ratio of 2.72 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that ranks higher than all but 2% of readings from the past year. In other words, an unwinding of optimism could ding the shares.

Analysts lean bullish, too, with 16 of the 24 in coverage calling QCOM a "buy" or better, while the remaining eight say "hold" or worse. Plus, the 12-month consensus target price of $152.79 is 4.6% higher than current trading levels, meaning downgrades and/or price-target cuts could be on the horizon, should the company's quarterly results disappoint.

 

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