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.