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Qorvo Inc QRVO

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Qorvo Reports Strong Near-Term Results, but the Market Was Likely Looking for More; $160 FVE

Brian Colello, CPA Sector Director

Analyst Note

| Brian Colello, CPA |

Qorvo reported strong fiscal third-quarter results and provided investors with an upbeat forecast for the March quarter as the company is capitalizing on 5G smartphone adoption. Qorvo’s results and forecast were ahead of our prior expectations and FactSet consensus estimates. However, the company’s closest competitor, Skyworks, reported one of the biggest blowout quarters we’ve seen in semis, beating its December quarterly revenue forecast by more than 40% and generating 68% year-over-year growth. Qorvo’s results did not meet this high bar, which we suspect led to shares being down as much as 7% after hours as the market was likely seeking a similar blowout. It appears that Skyworks increased its radio frequency chip content within Apple’s latest iPhone 12s, whereas Qorvo’s content per iPhone appears to be a bit more static compared with the prior generation. We have raised our fair value estimate for Qorvo to $160 from $140, as we boost our near-term revenue assumptions. Shares appear fairly valued to us.

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Company Profile

Business Description

Qorvo represents the combined entity of RF Micro Devices and TriQuint Semiconductor, which merged with one another in January 2015. The company specializes in radio frequency filters, power amplifiers, and front-end modules used in many of the world’s most advanced smartphones. Qorvo also has a suite of products sold into a variety of nonsmartphone end markets, such as wireless base stations, cable TV and networking equipment, and infrastructure and military applications.

Contact
7628 Thorndike Road
Greensboro, NC, 27409-9421
T +1 336 664-1233
Sector Technology
Industry Semiconductors
Most Recent Earnings Dec 31, 2020
Fiscal Year End Mar 28, 2021
Stock Type Cyclical
Employees 7,900