Intrinsic value of Qualcomm - QCOM

Previous Close

$65.76

  Intrinsic Value

$64.10

stock screener

  Rating & Target

hold

-3%

Previous close

$65.76

 
Intrinsic value

$64.10

 
Up/down potential

-3%

 
Rating

hold

We calculate the intrinsic value of QCOM stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 97.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  22,737
  23,260
  23,858
  24,529
  25,272
  26,088
  26,977
  27,938
  28,975
  30,087
  31,276
  32,546
  33,897
  35,333
  36,858
  38,473
  40,183
  41,991
  43,901
  45,918
  48,047
  50,291
  52,657
  55,150
  57,776
  60,540
  63,450
  66,511
  69,733
  73,121
Variable operating expenses, $m
  16,441
  16,795
  17,200
  17,655
  18,159
  18,711
  19,313
  19,965
  20,667
  21,420
  21,190
  22,050
  22,966
  23,939
  24,972
  26,066
  27,225
  28,450
  29,744
  31,111
  32,553
  34,074
  35,677
  37,366
  39,144
  41,017
  42,989
  45,063
  47,246
  49,541
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  16,441
  16,795
  17,200
  17,655
  18,159
  18,711
  19,313
  19,965
  20,667
  21,420
  21,190
  22,050
  22,966
  23,939
  24,972
  26,066
  27,225
  28,450
  29,744
  31,111
  32,553
  34,074
  35,677
  37,366
  39,144
  41,017
  42,989
  45,063
  47,246
  49,541
Operating income, $m
  6,296
  6,465
  6,657
  6,874
  7,114
  7,377
  7,663
  7,973
  8,308
  8,666
  10,086
  10,495
  10,931
  11,394
  11,886
  12,407
  12,958
  13,541
  14,157
  14,808
  15,494
  16,218
  16,981
  17,785
  18,631
  19,523
  20,461
  21,448
  22,487
  23,580
EBITDA, $m
  8,610
  8,808
  9,034
  9,288
  9,570
  9,879
  10,215
  10,580
  10,972
  11,393
  11,844
  12,324
  12,836
  13,380
  13,957
  14,569
  15,216
  15,901
  16,624
  17,388
  18,194
  19,044
  19,940
  20,884
  21,878
  22,925
  24,027
  25,186
  26,406
  27,689
Interest expense (income), $m
  0
  1,047
  1,083
  1,124
  1,171
  1,223
  1,281
  1,345
  1,415
  1,490
  1,571
  1,658
  1,751
  1,850
  1,956
  2,068
  2,187
  2,313
  2,447
  2,588
  2,737
  2,895
  3,061
  3,237
  3,422
  3,617
  3,822
  4,038
  4,265
  4,505
  4,756
Earnings before tax, $m
  5,249
  5,381
  5,533
  5,703
  5,890
  6,095
  6,318
  6,559
  6,818
  7,095
  8,428
  8,744
  9,081
  9,439
  9,818
  10,220
  10,645
  11,094
  11,569
  12,070
  12,599
  13,156
  13,744
  14,363
  15,015
  15,701
  16,423
  17,183
  17,982
  18,823
Tax expense, $m
  1,417
  1,453
  1,494
  1,540
  1,590
  1,646
  1,706
  1,771
  1,841
  1,916
  2,276
  2,361
  2,452
  2,548
  2,651
  2,759
  2,874
  2,995
  3,124
  3,259
  3,402
  3,552
  3,711
  3,878
  4,054
  4,239
  4,434
  4,639
  4,855
  5,082
Net income, $m
  3,831
  3,928
  4,039
  4,163
  4,300
  4,450
  4,612
  4,788
  4,977
  5,180
  6,152
  6,383
  6,629
  6,890
  7,167
  7,460
  7,771
  8,099
  8,445
  8,811
  9,197
  9,604
  10,033
  10,485
  10,961
  11,462
  11,989
  12,544
  13,127
  13,741

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  39,889
  40,807
  41,855
  43,033
  44,337
  45,769
  47,328
  49,015
  50,833
  52,783
  54,870
  57,097
  59,468
  61,988
  64,662
  67,496
  70,496
  73,668
  77,019
  80,558
  84,292
  88,230
  92,381
  96,755
  101,361
  106,211
  111,315
  116,687
  122,338
  128,282
Adjusted assets (=assets-cash), $m
  39,889
  40,807
  41,855
  43,033
  44,337
  45,769
  47,328
  49,015
  50,833
  52,783
  54,870
  57,097
  59,468
  61,988
  64,662
  67,496
  70,496
  73,668
  77,019
  80,558
  84,292
  88,230
  92,381
  96,755
  101,361
  106,211
  111,315
  116,687
  122,338
  128,282
Revenue / Adjusted assets
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
Average production assets, $m
  12,778
  13,072
  13,408
  13,785
  14,203
  14,662
  15,161
  15,701
  16,284
  16,909
  17,577
  18,291
  19,050
  19,857
  20,714
  21,622
  22,583
  23,599
  24,672
  25,806
  27,002
  28,264
  29,593
  30,994
  32,470
  34,023
  35,659
  37,379
  39,190
  41,094
Working capital, $m
  68
  70
  72
  74
  76
  78
  81
  84
  87
  90
  94
  98
  102
  106
  111
  115
  121
  126
  132
  138
  144
  151
  158
  165
  173
  182
  190
  200
  209
  219
Total debt, $m
  20,062
  20,818
  21,684
  22,655
  23,731
  24,912
  26,198
  27,590
  29,090
  30,699
  32,421
  34,258
  36,214
  38,293
  40,499
  42,837
  45,312
  47,929
  50,694
  53,614
  56,694
  59,943
  63,367
  66,976
  70,776
  74,777
  78,988
  83,420
  88,082
  92,986
Total liabilities, $m
  32,909
  33,665
  34,531
  35,502
  36,578
  37,759
  39,045
  40,437
  41,937
  43,546
  45,268
  47,105
  49,061
  51,140
  53,346
  55,684
  58,159
  60,776
  63,541
  66,461
  69,541
  72,790
  76,214
  79,823
  83,623
  87,624
  91,835
  96,267
  100,929
  105,833
Total equity, $m
  6,981
  7,141
  7,325
  7,531
  7,759
  8,010
  8,282
  8,578
  8,896
  9,237
  9,602
  9,992
  10,407
  10,848
  11,316
  11,812
  12,337
  12,892
  13,478
  14,098
  14,751
  15,440
  16,167
  16,932
  17,738
  18,587
  19,480
  20,420
  21,409
  22,449
Total liabilities and equity, $m
  39,890
  40,806
  41,856
  43,033
  44,337
  45,769
  47,327
  49,015
  50,833
  52,783
  54,870
  57,097
  59,468
  61,988
  64,662
  67,496
  70,496
  73,668
  77,019
  80,559
  84,292
  88,230
  92,381
  96,755
  101,361
  106,211
  111,315
  116,687
  122,338
  128,282
Debt-to-equity ratio
  2.870
  2.920
  2.960
  3.010
  3.060
  3.110
  3.160
  3.220
  3.270
  3.320
  3.380
  3.430
  3.480
  3.530
  3.580
  3.630
  3.670
  3.720
  3.760
  3.800
  3.840
  3.880
  3.920
  3.960
  3.990
  4.020
  4.050
  4.090
  4.110
  4.140
Adjusted equity ratio
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,831
  3,928
  4,039
  4,163
  4,300
  4,450
  4,612
  4,788
  4,977
  5,180
  6,152
  6,383
  6,629
  6,890
  7,167
  7,460
  7,771
  8,099
  8,445
  8,811
  9,197
  9,604
  10,033
  10,485
  10,961
  11,462
  11,989
  12,544
  13,127
  13,741
Depreciation, amort., depletion, $m
  2,314
  2,343
  2,377
  2,415
  2,456
  2,502
  2,552
  2,606
  2,664
  2,727
  1,758
  1,829
  1,905
  1,986
  2,071
  2,162
  2,258
  2,360
  2,467
  2,581
  2,700
  2,826
  2,959
  3,099
  3,247
  3,402
  3,566
  3,738
  3,919
  4,109
Funds from operations, $m
  6,145
  6,272
  6,416
  6,578
  6,756
  6,952
  7,164
  7,394
  7,641
  7,906
  7,910
  8,212
  8,534
  8,876
  9,238
  9,622
  10,029
  10,459
  10,913
  11,392
  11,897
  12,430
  12,992
  13,584
  14,208
  14,864
  15,555
  16,282
  17,046
  17,850
Change in working capital, $m
  1
  2
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  10
Cash from operations, $m
  6,144
  6,270
  6,414
  6,576
  6,754
  6,949
  7,162
  7,391
  7,638
  7,903
  7,907
  8,209
  8,530
  8,872
  9,234
  9,618
  10,024
  10,453
  10,907
  11,386
  11,891
  12,424
  12,985
  13,577
  14,200
  14,856
  15,546
  16,272
  17,036
  17,840
Maintenance CAPEX, $m
  -1,253
  -1,278
  -1,307
  -1,341
  -1,379
  -1,420
  -1,466
  -1,516
  -1,570
  -1,628
  -1,691
  -1,758
  -1,829
  -1,905
  -1,986
  -2,071
  -2,162
  -2,258
  -2,360
  -2,467
  -2,581
  -2,700
  -2,826
  -2,959
  -3,099
  -3,247
  -3,402
  -3,566
  -3,738
  -3,919
New CAPEX, $m
  -248
  -294
  -336
  -377
  -418
  -459
  -499
  -541
  -582
  -625
  -669
  -713
  -760
  -807
  -857
  -908
  -961
  -1,016
  -1,074
  -1,134
  -1,196
  -1,261
  -1,330
  -1,401
  -1,476
  -1,554
  -1,635
  -1,721
  -1,810
  -1,904
Cash from investing activities, $m
  -1,501
  -1,572
  -1,643
  -1,718
  -1,797
  -1,879
  -1,965
  -2,057
  -2,152
  -2,253
  -2,360
  -2,471
  -2,589
  -2,712
  -2,843
  -2,979
  -3,123
  -3,274
  -3,434
  -3,601
  -3,777
  -3,961
  -4,156
  -4,360
  -4,575
  -4,801
  -5,037
  -5,287
  -5,548
  -5,823
Free cash flow, $m
  4,643
  4,698
  4,771
  4,858
  4,958
  5,070
  5,196
  5,335
  5,486
  5,650
  5,547
  5,738
  5,942
  6,159
  6,392
  6,638
  6,901
  7,179
  7,473
  7,785
  8,114
  8,462
  8,829
  9,216
  9,625
  10,055
  10,508
  10,986
  11,488
  12,017
Issuance/(repayment) of debt, $m
  664
  757
  865
  971
  1,076
  1,181
  1,286
  1,392
  1,500
  1,609
  1,722
  1,837
  1,956
  2,079
  2,206
  2,338
  2,475
  2,617
  2,765
  2,920
  3,081
  3,249
  3,424
  3,608
  3,800
  4,001
  4,211
  4,432
  4,662
  4,904
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  664
  757
  865
  971
  1,076
  1,181
  1,286
  1,392
  1,500
  1,609
  1,722
  1,837
  1,956
  2,079
  2,206
  2,338
  2,475
  2,617
  2,765
  2,920
  3,081
  3,249
  3,424
  3,608
  3,800
  4,001
  4,211
  4,432
  4,662
  4,904
Total cash flow (excl. dividends), $m
  5,307
  5,455
  5,636
  5,829
  6,034
  6,251
  6,482
  6,727
  6,985
  7,259
  7,269
  7,575
  7,898
  8,238
  8,598
  8,976
  9,375
  9,796
  10,238
  10,704
  11,195
  11,711
  12,254
  12,825
  13,425
  14,056
  14,720
  15,417
  16,150
  16,921
Retained Cash Flow (-), $m
  -141
  -161
  -184
  -206
  -228
  -251
  -273
  -295
  -318
  -341
  -365
  -390
  -415
  -441
  -468
  -496
  -525
  -555
  -587
  -619
  -653
  -689
  -726
  -765
  -806
  -849
  -893
  -940
  -989
  -1,040
Prev. year cash balance distribution, $m
  23,906
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  869
  887
  907
  930
  957
  986
  1,017
  1,052
  1,090
  1,130
  1,173
  1,220
  1,269
  1,322
  1,378
  1,437
  1,500
  1,567
  1,638
  1,712
  1,791
  1,874
  1,961
  2,054
  2,151
  2,253
  2,361
  2,475
  2,594
  2,720
Cash available for distribution, $m
  29,072
  5,295
  5,453
  5,623
  5,806
  6,001
  6,209
  6,431
  6,667
  6,918
  6,904
  7,185
  7,483
  7,797
  8,130
  8,480
  8,850
  9,241
  9,652
  10,085
  10,541
  11,022
  11,527
  12,059
  12,619
  13,207
  13,826
  14,477
  15,162
  15,881
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  27,874
  4,847
  4,745
  4,630
  4,500
  4,355
  4,195
  4,020
  3,830
  3,627
  3,279
  3,066
  2,845
  2,618
  2,387
  2,155
  1,926
  1,702
  1,486
  1,282
  1,090
  915
  756
  614
  491
  385
  297
  224
  166
  120
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

QUALCOMM Incorporated is engaged in the development and commercialization of a digital communication technology called code division multiple access (CDMA). The Company is engaged in the development and commercialization of the orthogonal frequency division multiple access (OFDMA) family of technologies, including long-term evolution (LTE), which is an Orthogonal Frequency Division Multiplexing (OFDM)-based standard that uses OFDMA and single-carrier Frequency Division Multiple Access (FDMA), for cellular wireless communication applications. The Company's segments include QCT (Qualcomm CDMA Technologies), QTL (Qualcomm Technology Licensing) and QSI (Qualcomm Strategic Initiatives). The Company also develops and commercializes a range of other technologies used in handsets and tablets that contribute to end user demand. The Company's products principally consist of integrated circuits (chips or chipsets) and system software used in mobile devices and in wireless networks.

FINANCIAL RATIOS  of  Qualcomm (QCOM)

Valuation Ratios
P/E Ratio 39.3
Price to Sales 4.3
Price to Book 3.2
Price to Tangible Book
Price to Cash Flow 20.7
Price to Free Cash Flow 24.2
Growth Rates
Sales Growth Rate -5.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 28%
Cap. Spend. - 3 Yr. Gr. Rate -10.3%
Financial Strength
Quick Ratio 15
Current Ratio 0.1
LT Debt to Equity 63.1%
Total Debt to Equity 71.2%
Interest Coverage 0
Management Effectiveness
Return On Assets 4.2%
Ret/ On Assets - 3 Yr. Avg. 8.6%
Return On Total Capital 5.1%
Ret/ On T. Cap. - 3 Yr. Avg. 10.4%
Return On Equity 7.9%
Return On Equity - 3 Yr. Avg. 13.6%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 58%
Gross Margin - 3 Yr. Avg. 59.5%
EBITDA Margin 20.1%
EBITDA Margin - 3 Yr. Avg. 28.5%
Operating Margin 11.1%
Oper. Margin - 3 Yr. Avg. 20%
Pre-Tax Margin 13.5%
Pre-Tax Margin - 3 Yr. Avg. 22.7%
Net Profit Margin 11.1%
Net Profit Margin - 3 Yr. Avg. 18.7%
Effective Tax Rate 18.4%
Eff/ Tax Rate - 3 Yr. Avg. 17.9%
Payout Ratio 131.9%

QCOM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the QCOM stock intrinsic value calculation we used $22291 million for the last fiscal year's total revenue generated by Qualcomm. The default revenue input number comes from 2017 income statement of Qualcomm. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our QCOM stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for QCOM is calculated based on our internal credit rating of Qualcomm, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Qualcomm.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of QCOM stock the variable cost ratio is equal to 72.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for QCOM stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Qualcomm.

Corporate tax rate of 27% is the nominal tax rate for Qualcomm. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the QCOM stock is equal to 3.9%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for QCOM are equal to 56.2%.

Life of production assets of 10 years is the average useful life of capital assets used in Qualcomm operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for QCOM is equal to 0.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $30746 million for Qualcomm - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 1477 million for Qualcomm is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Qualcomm at the current share price and the inputted number of shares is $97.1 billion.

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