Technology giant Qualcomm (NASDAQ:QCOM) hasn't done much for investors this year. The stock is only up a few percent year to date, badly underperforming the broader market. However, the company has put up impressive fundamentals in this time, including strong growth of revenue and profits. The end result is that Qualcomm's valuation looks appealing for value investors hunting for cheap stocks.

Qualcomm is benefiting from the global smartphone boom. Its chips are used in a variety of devices, including smartphones, tablets, and wearables. Its fundamental success does not seem to be appreciated by investors, which seems like a mistake. Here's why Qualcomm looks like an attractive stock to buy right now.

Qualcomm is sneakily cheap
Qualcomm is putting up record operating results, but the stock has barely budged this year. Last quarter, the company set a record for revenue, earnings per share, and chip shipments. This is because of Qualcomm's impressive product lineup. Its semiconductor business is thriving, with MSM shipments soaring 31% year over year. Qualcomm's Snapdragon processor allows for smartphones to have longer battery life and higher speeds, and it's used in smartphones such as the Samsung Galaxy and HTC One. Another source of strength is the Qualcomm Gobi modem, which is critical to connectivity. The Gobi connects devices to 3G, 4G, and 4G LTE networks and boosts download speeds and data connections.

Prices of its devices sold are also going up, which is an added tailwind for the company. Qualcomm's average selling price per device reached $231 last quarter, which was a 3% increase versus the prior quarter and is at the highest point in the last two years.

Qualcomm stock might not seem like a screaming buy based on valuation alone, but its valuation is more compelling than it looks. That's because Qualcomm has excellent growth prospects. From a geographic perspective, Qualcomm is going to benefit hugely from emerging-market growth. This is particularly true in China, where growth is especially strong thanks to the ongoing 4G LTE rollout that is still in the early stages. Because of this, Qualcomm expects to ship 1.3 billion 3G and 4G devices globally this year. That would represent 20% growth from the prior year.

Still, there are fairly modest expectations for the company, which probably explains its average valuation. Qualcomm is cheaper than the broader market. The stock trades for 17 times trailing earnings per share and 13 times forward EPS estimates. But analyst estimates on this company are probably too conservative.

Qualcomm blew away estimates last quarter. Earnings per share clocked in at $1.44, which was way above expectations of $1.15-$1.25 per share. Full-year expectations call for 6%-9% revenue growth and between 17% and 21% earnings growth. There is nothing in Qualcomm's earnings reports to suggest it can't replicate its growth patterns over the first nine months of the year, so another rousing earnings beat is likely in store when it next reports.

Margins of safety support the valuation
Qualcomm's valuation is also supported by the fact that it buys back billions of dollars of its own stock every quarter. Qualcomm spent $3.3 billion on share repurchases through the first three quarters of the fiscal year. That is a nearly tripling from the $1.2 billion spent on share buybacks through the same period last year. Qualcomm is able to do this because it generates strong free cash flow. It's raking in the cash thanks to the smartphone boom. Over the first three fiscal quarters, Qualcomm's free cash flow is up 15%. Qualcomm also pays a nice 2.2% dividend yield, which puts even more cash in shareholders' pockets.

The bottom line is that Qualcomm is firing on all cylinders. It's successful across its products as well as across its key geographic markets. And yet, investors don't seem overly pleased with Qualcomm's impressive results. Shares of Qualcomm trade for a below-average valuation, despite the fact that Qualcomm's fundamentals are strengthening, it buys back a lot of stock, and it pays a solid dividend. If Qualcomm manages another earnings beat this quarter, the stock might not stay cheap for long.