Intel Corporation (INTC)’s Q1 Report Card

Based on current results, annualized expected sales are around $49 billion, with average cash earnings of $9.4 billion at a profit margin near 19%. Using cash earnings times a market capitalization multiplier calculation, Intel’s fair business value looks around $22 to $26 per share at a moderately discounted multiplier of 12x to 14x.

Intel is looking to steal market share from companies like NVIDIA Corporation (NASDAQ:NVDA). These smaller firms with less entrenched bases may find it harder to deal with Intel’s economies of scale and historic reach into the equipment manufacturers.

NVIDIA Corporation (NASDAQ:NVDA) currently trades at around a 14x multiplier, based on a market value of around $7.7 billion, revenue of $4.3 billion, average earnings of $516 million, and a profit margin of 12%.

There is no way Intel can threaten QUALCOMM, Inc. (NASDAQ:QCOM)’s dominance in the near-term. But if it overtakes smaller competitors and gains a foothold in mobile, Intel could begin to chip away at the company’s business.

QUALCOMM, Inc. (NASDAQ:QCOM) currently trades at about a 20x multiplier, based on a market value of around $110 billion with revenue of $24.4 billion, cash earnings of $5.3 billion, and a profit margin of about 22%.

Grade: B

Conclusion

Intel looks to have just started its evolution towards being a player in the mobile space. If it can develop attractive products and wield its fiscal and manufacturing clout, it could become a major competitor. The early signs seem fairly good and if they continue, shareholders could see noticeable gains.

The article Intel’s Evolution to Wireless: First Quarter’s Report Card originally appeared on Fool.com.

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