SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 138.95+1.9%12:06 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Diego.Dude2 who wrote (465)7/8/2000 10:47:55 AM
From: Tom Pulley   of 197621
 
Andrew, re "Removing Chipset business to collect Royalty alone would probably reduce big Q revenue quit abit, I would think. Anyone care to do the number?"

As a long term buy and hold investor, I look at the downside value of Qcom as defined by the royalty stream of CDMA/WCDMA/xxxCDMA. Last quarter the royalty end of the business grew revenues 58% year over year and earnings 60% year over year. This is consistent with long term projections I've seen of CDMA/WCDMA growth of 50% annually for 5+ years (although note that the growth rate will likely fluctuate dramatically in any given quarter due to product cycles and inventory cycles).

Now,if we take just the royalty earnings in 5 years I calculate $3.40 annual earnings. If PE equals growth rate = 50 (a lowside assumption on PE), then stock price goes to 170 based just on the royalty business. So if I buy the stock at the current price, I get 25% annual return at a minimum just based on the royalty earnings.

I fully believe that Qualcomm will do much much better than that, but when my downside case generates a 25% return annually, I would say this stock is a buy for long term buy and holders like me. I wouldn't be surprised if it goes even lower as news/FUD/negotiations proceed or chipset sales don't meet some analysts' expectations, but that would create an incredible buying opportunity compared to the current great buying opportunity!

Tom
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News