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I've been recommending QCOM since 1992, based solely on fundamentals. The H&Q report is truly ridiculous because it does not account for the fact that most CDMA handsets made today depend at least somewhat on patents held by QCOM, if not actual components, including ASICs. Estimating future stock price is really not that complicated if one relies on the lower end of estimates for sales growth, royalty growth, and margins on handsets. Taking these into consideration, and as always, taking the lower end of growth estimates, one can predict a price somewhere near 300, or double the present value, in a year, assuming a price-earnings ratio of 50, which, again is on the low side. The only factor I know of that would change such a CONSERVATIVE estimate is an overall market correction, forcing prices of almost everything down about 30 percent. And I don't see that kind of jolt on the horizon. When I see analyses like the H&Q, I first wonder whether they are purposely trying to get the price down in order to afford buying opportunities for their customers. But in this case, the analysis simply doesn't make sense at all, and I must conclude that they are simply wrongheaded on this one. |
