Qualcomm Beats Q1 Estimates but Cuts Guidance, Stock Down 19%
Qualcomm reported Q1 EPS of $3.50 on $12.25 billion revenue, beating $3.15 and $12.22 billion estimates, but cut its current-quarter guidance due to handset competition. Its stock is down 19% YTD and options volatility skew shows higher put IV, making cheap calls and implying a $127.55–$149.63 move.
1. Q1 Results and Guidance
Qualcomm posted fiscal Q1 EPS of $3.50 and revenue of $12.25 billion, beating consensus estimates of $3.15 and $12.22 billion. The company lowered its current-quarter sales and earnings outlook, citing intensifying competition among handset OEMs that pressured its forward guidance.
2. YTD Stock Performance and Options Skew
Following the guidance cut, Qualcomm’s stock has declined 19% year to date. Options market data reveal a pronounced volatility skew, with put implied volatility priced above calls, signaling increased demand for downside protection and making call options relatively inexpensive.
3. Expected Move Calculation
Using a Black-Scholes-derived model for the March 20 expiration, Qualcomm’s one-standard-deviation price range is $127.55 to $149.63, reflecting a 7.96% high-low spread. This range suggests where the stock might trade with 68% probability over the next 42 days.
4. Bayesian-Inspired Forecast
Applying a Markov-based, Bayesian framework to recent price patterns, Qualcomm is projected to trade between $132 and $158 over the next 10 weeks, with probability density peaking near $140. This approach integrates current market conditions into forward-looking price estimates.