Currently trading at $151, Qualcomm (NASDAQ: QCOM) may be one of the stocks that are about to go up, based on this detailed investing research report. Using a scenario-driven Discounted Cash Flow (DCF) model across Bear, Base, and Bull cases, we estimate the true intrinsic value of stock well above current levels. This analysis also includes a review of dividend sustainability, offering key insights for those focused on shares and investments. If you’re looking for quality stocks on sale backed by strong fundamentals, QCOM deserves a close look.
All figures are in millions of USD unless otherwise stated.
I. DCF Valuation — Bear Case
- EBITDA Growth Rate: 2%
- Terminal Growth Rate: 1.5%
- Discount Rate: 9%
- Sum of PV of UFCF (2024–2029): $47,955
- Terminal Value (TV): $173,338
- PV of Terminal Value: $112,658
- Enterprise Value (EV): $160,612
- Net Debt: $777
- Equity Value: $159,835
- Shares Outstanding: 1,104M
- Intrinsic Value per Share: $142.97
II. DCF Valuation — Base Case
- EBITDA Growth Rate: 4%
- Terminal Growth Rate: 2.5%
- Discount Rate: 7.5%
- Sum of PV of UFCF (2024–2029): $53,074
- Terminal Value (TV): $291,892
- PV of Terminal Value: $203,320
- Enterprise Value (EV): $256,393
- Net Debt: $777
- Equity Value: $255,616
- Shares Outstanding: 1,104M
- Intrinsic Value per Share: $228.64
III. DCF Valuation — Bull Case
- EBITDA Growth Rate: 6%
- Terminal Growth Rate: 3.5%
- Discount Rate: 6.5%
- Sum of PV of UFCF (2024–2029): $58,001
- Terminal Value (TV): $544,526
- PV of Terminal Value: $397,439
- Enterprise Value (EV): $455,440
- Net Debt: $777
- Equity Value: $454,663
- Shares Outstanding: 1,104M
- Intrinsic Value per Share: $406.68
IV. Valuation Summary and Upside Potential
- Current Price: $151
- Bear Case Intrinsic Value: $142.97 → -5% downside
- Base Case Intrinsic Value: $228.64 → 51% upside
- Bull Case Intrinsic Value: $406.68 → 169% upside
V. Dividend Sustainability Analysis
- Dividend per Share: $3.40
- Shares Outstanding: 1,104M
- Total Dividends Paid: 1,104 × 3.40 = $3,754M
- Free Cash Flow (Used for Analysis): $11,706M
- Dividend Payout Ratio (FCF Basis):
- $3,754 / $11,706 = 0.32 or ~32%
- Assessment:
- Dividend payout is conservative
- Over two-thirds of FCF is retained, allowing flexibility for reinvestment or increased shareholder returns
- Conclusion: Dividend is sustainable, with a moderate payout ratio
VI. Summary View
This analysis avoids forward-looking narrative and uses pure financial modeling to derive an equity value range.
- DCF Takeaway: Valuation scenarios highlight substantial upside from the current market price
- Dividend Outlook: Conservative payout ratio supports dividend durability
- Quantitative Conclusion: QCOM is undervalued under Base and Bull scenarios with 51% to 169% upside
Valuation Range: $142.97 – $406
