On its 2021 Investor Day, Qualcomm Incorporated (QCOM) provided bullish growth targets and financial guidance through fiscal 2024. The company’s shares jumped almost 8% on November 16 to close at $181.81.
Recently, the company reported better-than-expected fiscal Q4 results.
Notably, Qualcomm’s top management also revealed its strategy to continue to lead in mobile, and expand to the connected intelligent edge.
Moreover, the company forecasts continuing growth across revenue segments, including Handsets, RF Front-End, Automotive, and Internet of Things (IoT).
The semiconductor company has also stated that it is expanding its chipset business to tap the growth potential for its technology. The company forecasts the total addressable opportunity to grow from $100 billion to $700 billion over the next ten years.
Optimistic Financial Guidance Through 2024
Qualcomm provided financial guidance over the coming three–year period.
The company expects revenues to grow at mid-teens compounded annual growth rate (CAGR) by fiscal 2024, and achieve an operating margin of over 30% during the period.
Segment-wise, the company predicts Handset and RF front-end revenues to grow at least in line with a 12% CAGR by fiscal 2024.
Similarly, Automotive revenues are projected to grow to $3.5 billion in the next five years and $8 billion in 10 years, while IoT revenues will grow to $9 billion in fiscal 2024.
Management Weighs In
Sharing his optimism for the future, Qualcomm CEO, Cristiano Amon, said, “Qualcomm is at the beginning of one of the largest opportunities in its history, enabling a world where everyone and everything is intelligently connected.”
He further added, “Qualcomm is uniquely positioned to grow across multiple industries in addition to handsets, with a rapidly diversifying business that is not defined by any one single industry or customer.”
Wall Street’s Take
Following the announcement, Piper Sandler analyst Harsh Kumar increased the price target on Qualcomm to $225 (23.76% upside potential) from $190, and reiterated a Buy rating.
Meanwhile, Wall Street analysts are cautiously optimistic about the stock with a Moderate Buy consensus rating based on 12 Buys and 7 Holds. At the time of writing, the average Qualcomm price target was $188.38, which implies upside potential of 3.61% to current levels. Shares have gained 22% over the past year.
Smart Score
Furthermore, Qualcomm scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. (See Top Smart Score Stocks on TipRanks)
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