AC332 Financial Statement Analysis and Valuation (AC332)
Essay
94/100 Top Of The Year Coursework (AC332 Financial Statement Analysis and Valuation Module)
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Course
AC332 Financial Statement Analysis and Valuation (AC332)
Institution
London School Of Economics (LSE)
One of my greatest achievements throughout my 3-years at the LSE would be achieving the “best-in-course” grade from my AC332: Financial Statement Analysis and Valuation module taught by Dr. Stefano Cascino, achieving a score of 94/100 for my team’s presentation on the semiconductor industry, ...
● Adjusted Q1 2021 earnings beat consensus estimates by OUTPERFORM
$0.07 per share; earnings up 119% from Q1 2020
Target Price:
● Finalised $1.4B acquisition of Nuvia in January; a move $192.00 Upside/Downside:
which will lead to in-house Qualcomm designed CPU’s + 43.29%
Share Price:
● Sales showed strong growth (+63% yoy); the business $133.99*
* As of 23/03/2021
has been propelled by increased demand of 5G
52 Week Price (USD):
● Steve Mollenkopf to retire as CEO effective June 2021; 192.00
its confidence of carrying over excess demand into the new
120.00
calendar year’s order book once guidance is achieved, allow a
confident forecast of financials for 2021 and beyond. The 100.00
increased coverage and demand for 5G, the convergence of
80.00
computing and mobile architectures, and the expansion of mobile
technologies into other industries (automobile, IoT and gaming) 60.00
APR JUL SEPT DEC MAR
present significant opportunities for Qualcomm in the coming
years. Target Price: $192
LTM Share Price
Qualcomm plans to build in-house CPUs: Apple disrupted the Qualcomm's Price / LTM Sales:
entire industry by manufacturing and producing their efficient M1
chip. It is the first ARM-based system on a chip as a CPU for Apple
laptops. It comparatively uses less RAM than their Intel
counterparts and is highly coherent with their operating system.
With the acquisition of NUVIA, Qualcomm now has access to
NUVIA’s custom ARM design expertise and can now attempt to
rival Apple with their own in-house CPUs based on ARM Financials and Key Ratios (USD):
architecture. This would provide Qualcomm with the technology to
compete with Intel, AMD and now Apple in the consumer PC Year 2020A 2021E* 2022E*
space.
Consensus EPS 2.95 6.32 7.93
TP of USD 192: Q1 sales revenue saw strong growth (+63% yoy),
Dividend Yield 1.96% 1.80% 1.70%
however, the discount seen in the share price is largely attributable
to Q1 sales revenue coming in slightly lower than consensus EV/EBITDA 19.88x 13.00x 11.60x
estimates. This is partly due to the industry-wide supply constraints
- which is expected to be a temporary and not a structural change ROE% 85.54% 112% 77.5%
to the company’s profitability. Chip demand is outpacing supply for * Based on consensus estimates
many chip makers and hardware companies in today’s Market Data (USD):
digital-dominated, COVID-19 environment. Despite this, over the
past 12 months, Qualcomm shares are up 88%, compared with a Market Cap 150.75B ADTV 10.09M
65% gain for the PHLX Semiconductor Index. We believe
Qualcomm are well positioned to generate growth from new Free Float 99.88% Beta (5Y M) 1.34
markets such as EV, IoT, gaming and others.
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