Financial Analysis

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Financial Analysis

Executive Summary

After evaluating the financial data of Qualcomm, I recommend investors to buy the stock of the firm. It is one of the biggest and leading digital wireless telecommunication companies of United States of America and having great reputation. After reviewing the recent financial performance of Qualcomm by using its financial statements, I recommend that firm is performing well in the market thus the stock of the firm must hold because there is low risk while having higher return.

Company Overview

Qualcomm was established in the year 1985 by Parviz Nazarian, Irwin Jacobs, Andrew Vitrbi and Neil Kadisha. The business was started with the satellite messaging services and the integrated circuits for the digital radio communications. Qualcomm is an American global semiconductor company that designs, manufactures and markets the digital wireless telecommunication services. The headquarter of the form is in San Diego, California, United States of America. The firm is currently operating in more than 157 countries worldwide. The firm products and services include tracking devices, satellite phones, semiconductors, media FLO, Qualocomm Gobi, HALO and Mirason displays. The software's of the firm includes Eudora client, various operating systems, FEC codec, speech Codec, Eudora servers and various other products and services (Lee, 1994).

Analysis

Current Stock Price 73.58 ( Good for potential growth).

Stock Price: 59.02 - 73.89 (52 week range).

52 week High: 73.89 Low: 73.26

Price to Book: 3.43

Beta: 0.97

Income Statement Analysis

The sales revenue of the firm is increased from 17957000 in year 2011 to 19121000 in the year 2012 and 24866000 in the year 2013. The revenue has been increased from 6.5% to 3% form year 2012 to the year 2013 while the net income has also increased from .43 from the year 2011 to the year 2012 while 0.122 from 2012 to the year 2013 (Lee, 2011).

Cash Flow

The cash flow from the operating activities of the firm has been increased from 4900000 in the year 2011 to 5998000 to the year 2012 and 8778000 in the year 2013. Moreover the firm cash flow from investing activities for the year 2011 was 4489000 and 6877000 in the year 2012 while 1578000 in the year 2013. The cash flow from financing activities has also increased from 1915000 from year 2011 to 2335000 in the year 2013.

P/E Ratio

Qualcomm has the price to earnings ratio of 18.82 while the industry ratio of 17.3, it represents that the firm is trading at 18.82 times earnings on the other hand the industry is trading at 17.3. The indicates the stock of the Qualcomm is overvalued as compared with the industry. The price to the book ratio of the Qualcomm is 3.43 while the industry is trading at -2.3 times equity. It shows that the firms worth is well enough as compared with the industry average (Collier, 2011).

Peg Ratio

According to the Yahoo Finance the Qualcomm has the PEG of 0.87. It represents that the stock of the firm is not priced fairly and also undervalued. The current quarterly growth of Qualcomm is 11.20 which represents that ...