Qorvo Foresees Some Android Pain; FVE Down to $157 but Shares Still Undervalued

Qorvo reported admirable fiscal first-quarter results and provided investors with a solid forecast for the September quarter, but hinted that pain was ahead later in fiscal 2023 because of soft demand for low-end Android-based smartphones from Chinese original equipment manufacturers. We will lower our fair value estimate for no-moat Qorvo to $157 from $169, as we’re modestly less bullish on future revenue and gross margins. Yet we still view shares as undervalued for long-term, patient investors. We also still see an even more attractive margin of safety in shares of Qorvo’s rival, Skyworks Solutions, as it has less exposure to these Android devices.