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QUALCOMM Incorporated (QCOM) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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QUALCOMM Incorporated (QCOM)

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Intrinsic Value (DCF)

Current$169.27
→
Intrinsic$293.84
+74%
$194.15$293.84$492.15
Market implies 2% growth for 5 years
DCF analysis suggests QCOM could have 74% upside at 15% growth — verify assumptions match your view.
At $169, the market prices in only 2% growth — below historical 15%, suggesting low expectations.
Range: Bear $194 → Bull $492. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →11%13%15%17%
8%$367$400$435$472
10%$249$271$294$319
12%$186$202$219$238
14%$148$160$173$188

Bull Case

  • Bull case ($492) offers 191% upside at 18% growth, 8% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (2%) ≤ historical CAGR (15%)

Bear Case

  • Bear case ($194) with 12% growth, 12% discount rate
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5-Year Free Cash Flow Projection

Year 1$14.74B
Year 2$16.95B
Year 3$19.50B
Year 4$22.42B
Year 5$25.79B
Terminal$408.60B

📐 Model Inputs

Growth Rate15.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$12.82BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is QCOM stock undervalued or overvalued?
🟢 UNDERVALUED

QCOM trades at $169.27 vs. our DCF-derived intrinsic value of $293.84, implying +61% upside. At a 9.5% WACC and 15.0% projected FCF growth, the market appears to be underpricing the present value of QCOM's future cash flows. The bear case ($194.15) still suggests upside, providing margin of safety.

What is QCOM's intrinsic value?

Using a 5-year DCF model: Base FCF of $12.82B, projected at 15.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $9.29B net debt and dividing by 1.10B shares: Bear $194.15 | Base $293.84 | Bull $439.97. Current price $169.27 implies +61% to base case.

How is QCOM's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 15.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($333.99B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 26.1x.