Qorvo Earnings: Maintaining $128 Fair Value Estimate Despite Near-Term Inventory Headwinds

No-moat Qorvo reported fiscal 2024 fourth-quarter earnings ahead of our expectations but gave a rather bleak outlook for the June quarter. We are encouraged to see Qorvo’s enduring status as a key supplier for the Chinese Android manufacturers and increased defense and aerospace sales. However, Qorvo will face inventory adjustments at its largest customer, Apple, which will weigh on results for the June quarter, in turn leading Qorvo to likely achieve only “modest” growth in fiscal 2025 (ending March 2025). Our long-term outlook remains unchanged, and we keep our fair value estimate at $128 per share. Shares appear undervalued after a roughly 12% selloff after hours.