Rick Pendergraft's Avatar
published in Blogs
Jul 27, 2020

Big Week for Telecom Equipment Earnings

We are in the heart of the second quarter earnings season and we have already heard from a number of big tech companies. There have been a few positive surprises, but it seems like there have been more negative surprises. At least the reaction from investors has been negative.

Earnings results will continue to roll in this coming week and the telecom equipment industry will be in the spotlight. Corning (GLW) and Juniper Networks (JNPR) are both set to report on Tuesday while Qualcomm (QCOM) is set to report on Wednesday.

Tickeron has a positive outlook on this group and predicts a further increase by more than 4.00% within the next month. The likelihood of success is 73%. The scorecard shows Corning rated as a “strong buy” while Juniper and Qualcomm both have “buy” ratings. 

The fundamental analysis summary shows both Corning and Juniper are undervalued at this time. Qualcomm is fairly valued. Qualcomm scores better than the others in the Profit Vs. Risk rating while Juniper is poorly rated in that category. Qualcomm has two positive, or green, ratings and no negative ratings. Corning and Juniper each have two positive ratings with one negative rating for each.

The technical analysis screener shows Corning with three positive readings from the AROON Indicator, the MACD, and the Momentum Indicator. The only negative reading is from the Bollinger bands and that rating only shows odds of success at 55% on a move lower.

Juniper shows bullish signals from its MACD and Momentum indicators, but it has bearish signals from its AROON indicator and the Bollinger Bands. Qualcomm shows bullish signals from the Bollinger Bands and the AROON Indicator. There are also bearish signals from the Stochastic indicators and the Momentum indicator.

Looking at the weekly charts, Corning and Qualcomm both show weekly stochastic readings that are in overbought territory. Qualcomm’s readings just made a bearish crossover and past instances of bearish crossovers have been pretty accurate at predicting downturns in the stock. Corning’s stochastic readings just turned higher and are still climbing at this point.

Juniper’s weekly chart shows that the stock is just below its 104-week moving average. The RSI is climbing, but it isn’t in overbought territory. The stochastic indicators made a bullish crossover this week. The readings are just below the 60 level currently, so they have a way to go before they would be in overbought territory.

One area where we see a big difference between the three stocks is in the earnings estimates and the sentiment readings. Corning has seen the consensus estimate for the quarter drop considerably over the last 90 days while the estimates for Juniper and Qualcomm have dropped slightly.

Analysts and short sellers are far more bullish on Qualcomm than they are on the other two. Of the 29 analysts covering Qualcomm, 18 have the stock rated as a “buy”. Corning and Juniper each have a meager five “buy” ratings. If we look at the ratings in terms of the buys as a percentage of the total, Qualcomm’s buy percentage is at 62%. Corning’s buy percentage is only 38.5% and Juniper’s is really low at 23.8%.

The short interest ratios (SIR) for Corning and Juniper are higher than the average stock with readings of 4.5 and 4.0, respectively. The average short interest ratio is in the 3.0 range. We see that Qualcomm’s ratio is well below average at 1.7.

Based on all of the data, the fundamentals, the technical analysis, and the sentiment indicators, it looks like Juniper has the best shot at moving higher after the earnings report. The fundamentals are decent, the stock isn’t overbought, and the sentiment is skewed to the bearish side. From a contrarian perspective, having bearish sentiment is a good thing.

Qualcomm may be the better long-term investment, but investors might be better served waiting for a little dip before entering a new position. Corning’s short-term indicators look good and that’s why it gets the “strong buy” rating from the Tickeron scorecard.

Related Ticker: QCOM

QCOM's RSI Oscillator ascends from oversold territory

The RSI Indicator for QCOM moved out of oversold territory on May 15, 2023. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 25 similar instances when the indicator left oversold territory. In of the 25 cases the stock moved higher. This puts the odds of a move higher at .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 56 cases where QCOM's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .

The Momentum Indicator moved above the 0 level on May 26, 2023. You may want to consider a long position or call options on QCOM as a result. In of 74 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .

The Moving Average Convergence Divergence (MACD) for QCOM just turned positive on May 19, 2023. Looking at past instances where QCOM's MACD turned positive, the stock continued to rise in of 45 cases over the following month. The odds of a continued upward trend are .

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where QCOM advanced for three days, in of 322 cases, the price rose further within the following month. The odds of a continued upward trend are .

Bearish Trend Analysis

Following a 3-day decline, the stock is projected to fall further. Considering past instances where QCOM declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

QCOM broke above its upper Bollinger Band on May 26, 2023. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

The Aroon Indicator for QCOM entered a downward trend on May 26, 2023. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.

Fundamental Analysis (Ratings)

Fear & Greed

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (6.242) is normal, around the industry mean (6.997). P/E Ratio (11.765) is within average values for comparable stocks, (54.530). Projected Growth (PEG Ratio) (1.142) is also within normal values, averaging (2.588). Dividend Yield (0.027) settles around the average of (0.024) among similar stocks. P/S Ratio (3.036) is also within normal values, averaging (11.530).

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 63, placing this stock better than average.

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. QCOM’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

Notable companies

The most notable companies in this group are NVIDIA Corp (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM), Broadcom (NASDAQ:AVGO), Advanced Micro Devices (NASDAQ:AMD), Texas Instruments (NASDAQ:TXN), QUALCOMM (NASDAQ:QCOM), Intel Corp (NASDAQ:INTC), Applied Materials (NASDAQ:AMAT), Analog Devices (NASDAQ:ADI), Lam Research Corp (NASDAQ:LRCX).

Industry description

The semiconductor industry manufacturers all chip-related products, including research and development. These chips are used in innumerable electronic devices, including computers, cell phones, smartphones, and GPSs. Intel Corporation, NVIDIA Corp., and Broadcomm are some of the prominent players in this industry. Semiconductor companies usually tend to do well during periods of healthy economic growth, thereby inducing further research and development in the industry – which in turn augurs well for productivity and growth in the economy. In the near future, demand for semiconductor products (and possibly innovation within the segment) should only expand further, with the proliferation of 5G, autonomous vehicles, IoT, and various AI-driven electronics set to herald a new, advanced chapter in the technology-driven world as we know it. With burgeoning prospects comes great competition. In 2015, SIA estimated that U.S. semiconductor industry ranks as the second most competitive U.S. industry out of 2882 U.S. industries designated manufacturers by the U.S. Census Bureau.

Market Cap

The average market capitalization across the Semiconductors Industry is 27.72B. The market cap for tickers in the group ranges from 13.43K to 961.97B. NVDA holds the highest valuation in this group at 961.97B. The lowest valued company is CYBL at 13.43K.

High and low price notable news

The average weekly price growth across all stocks in the Semiconductors Industry was 6%. For the same Industry, the average monthly price growth was 16%, and the average quarterly price growth was 16%. PRSO experienced the highest price growth at 177%, while MMTIF experienced the biggest fall at -20%.

Volume

The average weekly volume growth across all stocks in the Semiconductors Industry was 57%. For the same stocks of the Industry, the average monthly volume growth was 100% and the average quarterly volume growth was 415%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 52
P/E Growth Rating: 55
Price Growth Rating: 49
SMR Rating: 62
Profit Risk Rating: 62
Seasonality Score: 10 (-100 ... +100)
Related Portfolios: TELECOMMUNICATION SECTOR
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