QUALCOMM (QCOM): fair value

Fair-value band

The normal range for this name runs from $133 (cheap) to $236 (expensive); it is now priced at $174.

That is 0.3σ below this name's own normal premium.

Is QUALCOMM undervalued?

Fair, relative to its own history. QUALCOMM trades at $174, 16% above the fair value this model estimates, but it has habitually traded 23% above fair value, and today's gap is 0.3σ below that norm, within the range it normally trades in, so the verdict is Fair: priced normally for itself, not necessarily fairly valued.

Diligence checklist

8 pass · 1 fail · 2 no data

• PASSCash actually collected from profit, last 12 months: 144%XBRL · QUALCOMM gets $1.44 of real cash for every $1 of reported profit which means profits are real and not just numbers on paper. That's a good sign.
• FAILGap between paper profit and real cash: -5.6%XBRL · QUALCOMM collected more cash than it booked as profit, by 5.6% of everything it owns. That is the conservative direction, but it is far enough past my 5% line to flag: a gap this wide usually means something large and non-cash is running through the earnings, and I want to know what it is before I trust the profit figure.
• PASSDebt compared to one year of cash earnings: 0.61xXBRL · QUALCOMM could pay off everything it owes, net of the cash it holds, with 0.61 of a single year's earnings. My limit for a name I would buy is three years, so debt is not a risk here.
• PASSHow much more it earns on capital than that capital costs: +8.54ppXBRL · QUALCOMM earns 8.5 points more on the capital it employs than that capital costs. The gap is real but not wide, so growth here creates value at a modest rate rather than compounding it. The gap is no wider than it was at the start of the window.
• PASSStock sold by executives and directors on the open market, last 6 months: $0.0MEDGAR · Nobody running QUALCOMM sold a single share on the open market in the last 6 months. That is the alignment I want: the people with the most information about the business are keeping their money in it. A further $11.7M went out under pre-planned 10b5-1 schedules, which I don't count: those sales are set up months ahead and say nothing about what management thinks today. Options being exercised, and shares held back to cover the tax on them, are not sales and I don't count them either.
• PASSHow long the CEO has run this company: 5.8 yearsTEXT · QUALCOMM's chief executive has held the job since January 4, 2021, which is 5.8 years and covers a full cycle: good years and bad ones, both on this person's record. That is long enough for the record to mean something. Time served isn't the same as doing the job well, though, so read this next to the return-on-capital line above, which covers the same years. filing ↗
• PASSProfit margin held up during the last sales slump: 55.6% vs 58.1% baseXBRL · The last time QUALCOMM's revenue fell, its profit margin per unit sold only slipped a little, from about 58.1% to 55.6%. It means QUALCOMM isn't being forced to cut prices to keep product moving, which is what a company with a weak competitive position has to do. This is the accounts talking, not the filing: I'm reading the 5 quarters from June 2023 to June 2024, measured against the year going into it, and a shift in what the company sold can imitate pricing power either way.
• PASSNormal profit margin across a full business cycle: FCF margin 24.9% vs 28.5% medianXBRL · QUALCOMM's current cash margin (24.9%) sits a little below its long-run average (28.5%). My valuation grows the average, so a soft patch doesn't get written into the value as if it were permanent. Across the window the margin ran between 16.4% in September 2022 and 35.2% in March 2024.
• N/AHow much of the stock trades on an average day: $2,557MMARKET · QUALCOMM trades so much volume that this basically isn't a concern. There's no pass or fail here because the answer depends on how big a position I'd actually want to take.
• N/AShare of revenue from its single biggest customer: not establishedTEXT · I fetched and read QUALCOMM's November 5, 2025 10-K but found no sentence about customer concentration. That isn't the same as the filing saying there is none: it may simply be worded in a way my search doesn't catch. Read Item 1 and the concentration-of-risk note yourself before trusting this row. filing ↗
• PASSWhether the company switched auditors in the last 2 years: noneEDGAR · Companies sometimes switch accounting auditors right before something bad is uncovered which can be a warning sign. QUALCOMM hasn't changed auditors in the last 2 years, so there's no such red flag here.