Qorvo, Inc. (QRVO) in Greensboro, N.C., develops and commercializes technologies and products for worldwide wireless, wired, and power markets. The company operates through two segments—Mobile Products; and Infrastructure and Defense Products.
On June 7, 2022, QRVO launched its 20W GaN-on-SiC power amplifier (PA) for defense and commercial satellite applications. This PA is being characterized as a renaissance in the satellite communication industry thanks to its vast bandwidth range and leading market performance.
Over the past month, QRVO stock has gained 2.1% in price to close yesterday’s trading session at $109.38. However, the stock has declined 30.1% year-to-date and 40.6% over the past year.
Here is what could shape QRVO’s performance in the near term:
Mixed Financials
For its fourth fiscal quarter, ended April 2, 2022, QRVO’s revenue increased 8.7% year-over-year to $1.17 billion. However, its operating income came in at $270.60 million, down 7.7% year-over-year. Furthermore, its net income came in at $212.28 million, down 28.9% year-over-year, while its EPS came in at $1.95, down 25% year-over-year.
Mixed Profit Margins
QRVO’s 49.29% trailing-12-month gross profit margin is 2.2% lower than the 50.38% industry average. And the company’s 0.63% trailing-12-month asset turnover ratio is marginally lower than the 0.64% industry average.
However, QRVO’s 35.76% trailing-12-month EBITDA margin is 165.1% higher than the 13.49% industry average. And its 22.51% and 13.76% respective trailing-12-month ROCE and ROTA compare with the 7.95% and 3.46% industry averages.
Unfavorable Analyst Expectations
Analysts expect QRVO’s revenue to decline 4.8% year-over-year to $1.03 billion for the quarter ending June 30, 2022. In addition, its revenue is estimated to decline 2.2% year-over-year to $4.54 billion in 2023. And its EPS is expected to decline 24.7% in the current quarter and 13.9% in the current year.
Among the 19 Wall Street analysts that rated QRVO, eight rated it Buy, while eleven rated it Hold.
POWR Ratings Reflect Uncertainty
QRVO has an overall C rating, which equates to Neutral in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
The stock has a C grade for Momentum, which is consistent because the stock is currently trading lower than the 50-day moving average of $112.28.
Furthermore, QRVO has a C grade for Stability, which is in sync with its 1.34 beta.
In the 95-stock Semiconductor & Wireless Chip industry, QRVO is ranked #45. The industry is rated B.
Click here for the additional POWR Ratings for QRVO (Value, Sentiment, Growth, and Quality).
View all the top stocks in the Semiconductor & Wireless Chip industry here.
Click here to checkout our Semiconductor Industry Report for 2022
Bottom Line
A pioneer in the semiconductor industry, QRVO enjoys strong consumer demand. However, its revenue growth did not translate to bottom-line improvement. Also, with analysts expecting its EPS to decline further this year, I think investors should wait for a better entry point in the stock.
How Does Qorvo, Inc. (QRVO) Stack Up Against its Peers?
While QRVO has an overall POWR Rating of C, one might consider looking at its industry peers, Cirrus Logic, Inc. (CRUS), STMicroelectronics N.V. (STM), and Semtech Corporation (SMTC), which have an overall A (Strong Buy) rating, and Intel Corporation (INTC), which has an overall B (Buy) rating.
QRVO shares were unchanged in premarket trading Thursday. Year-to-date, QRVO has declined -30.06%, versus a -13.15% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
Is Qorvo a Good Semiconductor Stock to Buy This Month? StockNews.com
