Last week, the Nasdaq 100 recorded modest gains and is currently hovering near its all-time high, fueled by a softer-than-expected inflation report and robust second-quarter corporate earnings results. Furthermore, with the weekly jobless claims declining for a third straight week, and the growing notion that recent price increases are transitory, investors are brimming with optimism.
While this suggests that the financial markets are no longer concerned with inflation, rising COVID-19 cases in various parts of the world due to the spread of the Delta variant could keep the stock market volatile for now. However, Chief Investment Officer Xian Chan of HSBC noted that the broad success of vaccination programs should continue driving the economic recovery in the second half of the year.
Given this backdrop, investors remain bullish about prominent Nasdaq 100 stocks that have recently helped the index climb to an all-time high. Qualcomm Incorporated (QCOM), Regeneron Pharmaceuticals, Inc. (REGN), and Workday, Inc. (WDAY) are three such stocks. They have gained substantially over the past few months and are well-positioned to maintain the momentum in the near term.
Qualcomm Incorporated (QCOM)
QCOM in San Diego, Calif., is a leading semiconductor and telecommunications equipment operator that develops and commercializes consumer electronic devices, network equipment, broadband gateway equipment, and other devices worldwide. The company operates through Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI) segments.
This month, QCOM submitted an offer to acquire Veoneer for $37 per share in a step toward fulfilling its ambition to offer advanced technologies to the automotive industry. The acquisition should enable the company to drive innovation, provide industry-leading solutions, and cater to the increasing needs of automakers as the automotive industry continues to transform.
In July, the company inked a new deal with the government of Peachtree Corners, Ga., to test a variety of new technology related to Cellular Vehicle-to-Everything technology. As a result, QCOM’s industry-leading C-V2X technologies should enhance its smart infrastructure for technology developers and residents.
QCOM’s total QCT revenues increased 70% year-over-year to $6.47 billion in its fiscal third quarter, ended June 27, 2021. Its automotive segment revenue rose 83% from the prior-year quarter to $253 million. The company’s non-GAAP income from operations amounted to $445.17 million, representing a 117.9% year-over-year improvement. Its non-GAAP net income rose 124% from its year-ago value to $2.20 billion, while its EPS increased 123.3% year-over-year to $1.92. QCOM reported $3.37 billion in net cash provided by operating activities for this quarter, compared to $1.87 billion in the prior-year period.
A $2.04 consensus EPS estimate for the next quarter, ending September 2021, represents a 40.7% improvement year-over-year. In addition, QCOM has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. The $32.18 billion consensus revenue estimate for the current year indicates a 48.6% increase year-over-year. The stock has gained 31.1% over the past year and 5.3% over the past month.
QCOM’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
The stock also has a B grade for Sentiment, Value, and Quality. We also have graded QCOM for Momentum, Stability, and Growth. Click here to access all QCOM’s ratings.
QCOM is ranked #14 of 99 stocks in the B-rated Semiconductor & Wireless Chip industry.
Click here to checkout our Semiconductor Industry Report for 2021
Regeneron Pharmaceuticals, Inc. (REGN)
Based in Tarrytown. NY., REGN is a leading biotechnology company that discovers, manufactures, and commercializes pharmaceutical products to treat various medical conditions worldwide. Its product portfolio includes Dupixent injection to treat atopic dermatitis in adults, ZALTRAP injection for intravenous infusion to treat metastatic colorectal cancer, and EYLEA injection to treat wet age-related macular degeneration, among others.
This month, the New England Journal of Medicine published positive Phase 3 trial results of REGN’s REGEN-COV (casirivimab and imdevimab) to prevent SARS-CoV-2 infection among individuals. The result also demonstrated the drug’s effectiveness against all COVID-19 variants of concern.
In July, REGN formed a partnership with AstraZeneca to research, develop and commercialize new small-molecule medicines directed against the GPR75 target to potentially treat obesity and related co-morbidities. In addition, this strategic collaboration should enable REGN to deploy its gene-editing technologies to cater to the needs of patients.
In the second quarter, ended June 30, 2021, REGN’s total revenues increased 163.2% year-over-year to $5.14 billion. The company’s EYLEA U.S. net sales increased 28% from the prior-year quarter to $1.42 billion, while Dupixent’s global net sales rose 59% year-over-year to $1.50 billion. Its income from operations increased 409.9% from the prior-year quarter to $3.35 billion, while its net income grew 245.4% year-over-year to $3.10 billion over the period. REGN’s EPS increased 267.5% year-over-year to $27.97.
Analysts expect REGN’s revenue for its fiscal year 2021 to be $12.1 billion, representing 42.4% year-over-year growth. REGN has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. The company’s EPS is expected to increase 49.4% for the current year. Also, its stock price has surged 29.3% year-to-date and 20.8% over the past three months.
REGN’s POWR Ratings reflect this promising outlook. The stock has a B overall rating, which translates to Buy in our POWR Ratings system. It has a B grade for Growth, Sentiment, and Quality. In addition to the POWR Ratings grades we’ve just highlighted, one can see REGN ratings for Stability, Momentum, and Value here.
Of the 502 stocks in the Biotech industry, REGN is ranked #11.
Note that REGN is one of the few stocks handpicked by our Chief Value Strategist, David Cohne, currently in the POWR Value portfolio. Learn more here.
Workday, Inc. (WDAY)
Enterprise cloud-based applications provider WDAY offers financial management and human capital management software to manage critical business functions. The Pleasanton, Calif.-based concern also provides applications for analytics and reporting, cloud spend management solutions, and other Workday applications to healthcare, higher education, and professional services.
This month, WDAY entered a strategic, multi-year partnership with Google Cloud to enable enterprises worldwide to further their digital transformations. This partnership will allow WDAY’s customers in the healthcare, retail and financial services sector to run finance, HR, and planning applications on Google Cloud.
In July, RSM US LLP, the nation’s fifth-largest accounting firm, selected WDAY to help accelerate its digital transformation and establish a single system for financial management, human resources, and professional services automation. The partnership with RSM should help the company deliver leading edge innovation and grow its portfolio of customers.
During the first quarter, ended April 30, 2021, WDAY’s revenues increased 15.4% year-over-year to $1.18 billion, driven primarily by a 17% rise in subscription revenues. Its operating cash flow increased 71.6% from its year-ago value to $452.4 million, while its cash, cash equivalents, and marketable securities stood at $2.99 billion during this period.
WDAY’s EPS is expected to increase 20.5% in fiscal year 2023. The $50.03 billion consensus revenue estimate for the current year represents a 16.5% improvement from the same period last year. Over the past year, the stock has returned 28.8%. In addition, the stock has returned 6.3% over the past three months.
It’s no surprise that WDAY has an overall B rating, which equates to Buy in our POWR Ratings system. The stock has an A grade for Growth and a B for Sentiment. Click here to see the additional POWR Ratings for WDAY (Stability, Momentum, Value, and Quality)
In the D-rated Software – Application industry, WDAY is ranked #22 of 144 stocks.
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QCOM shares fell $0.96 (-0.65%) in premarket trading Monday. Year-to-date, QCOM has declined -1.89%, versus a 19.58% rise in the benchmark S&P 500 index during the same period.
About the Author: Imon Ghosh
Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization. More...
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