QS Research · Michael Burry's Scion Capital analyst template · 2006
QUALCOMM INC/DE (QCOM)
As of 2026-11-06 · 11/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction low · base case -1% · downside -13% · upside +21%
The base case rests on FY2021-FY2026 normalized EBITDA of $12.44B (normalized EBIT $10.76B; normalized FCF $9.66B), not FY2026/TTM EBITDA of $10.29B (EBIT $8.66B; FCF $8.65B); at 14.7x, less $7.81B net debt and divided by 1,070M shares, that is $163.6/share, about equal to the $164.76 price (-0.7%). The 12.9x P/E is not an operating anchor because FY2026 net income of $13.63B exceeds pre-tax income of $9.41B and operating income of $8.66B, flattered by a $5.7B tax benefit. Downside at 12.9x is $142.7 (-13.4%) and upside at 17.8x is $199.6 (+21.1%), so reward/risk is about 1.6:1 but the base case has no +30% cushion and the stock is roughly at normalized fair value. The market is missing a still-cash-generative QTL licensing base and scaling automotive/data-center optionality, but it is not mispricing the handset decline enough to clear the long rule. Verdict: pass until price approaches the downside case or normalized EBITDA is proven higher by data-center/non-handset execution.
Key numbers
- Share price: $164.76
- Market cap: $176.29B
- Latest financial period: FY Sep 2026 to Sep 27, 2026
- Revenue (FY Sep 2026): $43.12B
- EV / EBITDA (FY Sep 2026): 17.8x
- P/E (FY Sep 2026): 12.9x
The 15 boxes
- ✓ 1. Long-form business notes
QCOM makes money by selling QCT chips/platforms and licensing QTL intellectual property, with QSI making strategic investments. The FY2026 10-K describes a broader AI/intelligent-computing platform across handsets, automotive, IoT and data center, versus the FY2020 10-K's wireless-industry framing. The six-year XBRL shows cyclical revenue and operating income—FY2026 revenue $43.12B and operating income $8.66B—while FY2026 net income of $13.63B is above pre-tax income and should not be used as the operating result. The provided sources do not include TTM figures or segment-level revenue/profit.
- ○ 2. Competitive advantage
QCOM's durable advantage in these sources is the combination of QTL's patent/IP licensing position in cellular standards and QCT's Snapdragon platform breadth; the 10-K says its IP is in widely deployed standards and licensed to hundreds of companies. The financial record is cyclical: operating income ranged $7.79B-$15.86B in FY2021-FY2026, with FY2026 at $8.66B on $43.12B revenue, while operating cash flow stayed $9.10B-$14.01B. Net income is not a clean operating measure: FY2025 net income $5.54B was far below $12.66B pre-tax income, and FY2026 net income $13.63B was above $9.41B pre-tax income. The excerpt does not name competitors or give equity/ROE data.
- ✓ 3. 10-Q takeaways
Q3 FY2026 (quarter ended 2026-06-28) revenue was $9,947 million, down 4% from $10,365 million a year ago, with net income of $2.0 billion down 25% and gross margin 53% versus 56%. The operating story is a handset-led decline (QCT handsets $5,086M vs $6,328M) only partly offset by automotive ($1,588M vs $984M) and IoT ($1,830M vs $1,681M), with QCT EBT margin down to 26% from 30% on higher product cost and higher R&D/SG&A. Both the quarter's net income and the nine-month results are distorted by one-offs: $726M of marketable-securities gains from QSI IPOs inside investment income of $1,014M, and a $5.7 billion valuation-allowance release in Q2 FY2026 that swung nine-month tax to a $4,136M benefit (effective rate (50)%). Cash fell to $8,304M from $12,478M on $6.8 billion of buybacks and $2.9 billion of dividends, while operating cash flow slipped to $8,405M from $10,016M.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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