UBER Holdings, Inc. (UBER)vs QCOM Holdings, Inc. (QCOM)

Quick verdict

UBER Holdings, Inc. (UBER) and QCOM Holdings, Inc. (QCOM) appeal to different investors. On our six-factor framework, UBER scores 3 and QCOM scores 3. QCOM looks cheaper on the multiples that matter, while UBER grows faster and UBER earns higher returns on capital. The two are evenly matched overall, so your priority — value, growth, income or safety — should decide it.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

UBER Holdings, Inc. operates in Oil & Gas Integrated (Energy), while QCOM Holdings, Inc. sits in Software—Infrastructure (Technology). The two operate in different sectors, so cyclicality and end-market exposure differ — factor that into any portfolio overlap. UBER carries a beta of 1.53 versus 1.14 for QCOM, meaning UBER has historically been the more volatile of the two.

Valuation

On valuation, QCOM is the cheaper stock. UBER trades on a forward P/E of n/a and EV/EBITDA of 20.91, against n/a and 12.51 for QCOM. Price-to-sales is 9.39 vs 1.25, and free-cash-flow yield is 6.7% vs 1.2%. A higher multiple is only justified if the company can sustain faster growth or wider margins, which is exactly what the next sections test.

Growth profile

UBER is the faster grower. UBER has compounded revenue at 19.6% over three years with EPS growth of 12.9%, while QCOM has delivered 10.8% revenue and 10.4% EPS growth. Growth like this is the single biggest driver of long-term returns, but it also tends to come with a richer valuation, so it must be weighed against the multiples above.

Profitability and quality

On profitability and quality, UBER is stronger. UBER posts a -8.0% operating margin, 1.9% return on equity and -6.0% return on invested capital. QCOM posts -7.8%, -15.3% and -11.5% respectively. Return on invested capital above roughly 15% is a hallmark of a durable competitive advantage, so this metric deserves particular attention.

Balance-sheet risk

QCOM has the safer balance sheet. UBER carries net-debt/EBITDA of 2.07x with a current ratio of 3.09, versus 1.67x and 2.20 for QCOM. Lower leverage gives a company more room to invest through a downturn and reduces the risk of dilution or distress.

Price performance and shareholder returns

Over the past year UBER returned 76.6% against 63.1% for QCOM; on a three-year annualised basis it is 24.9% vs 13.4%. UBER yields 0.4% and QCOM yields 2.4%. Past performance never guarantees future results, but the multi-year track record shows how the market has rewarded each business so far.

Which stock fits which investor

For value-oriented investors, QCOM is the better fit on today's multiples. Growth investors will likely prefer UBER, which is expanding faster. Income investors should lean toward QCOM for its higher shareholder yield, while investors who prize quality-at-a-reasonable-price will favour UBER for its superior returns on capital. This is a comparison of facts, not a recommendation — your time horizon, risk tolerance and existing holdings should drive the final decision.

• Value: QCOM
• Growth: UBER
• Income: QCOM
• Quality: UBER

Frequently asked questions

Is UBER or QCOM the better buy right now?

Neither is universally "better." UBER scores 3 and QCOM scores 3 on our six-factor framework. QCOM is cheaper, UBER grows faster, and UBER is higher quality — so the right pick depends on your objective.

Which stock is cheaper, UBER or QCOM?

QCOM is the cheaper stock across forward P/E (n/a vs n/a), EV/EBITDA (20.91 vs 12.51) and price-to-sales (9.39 vs 1.25).

Which has grown faster, UBER or QCOM?

UBER has the stronger growth profile, with three-year revenue CAGR of 19.6% for UBER versus 10.8% for QCOM.

Which stock pays a bigger dividend?

UBER yields 0.4% and QCOM yields 2.4%, so QCOM is the stronger income choice.

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