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QRVO

Qorvo NasdaqGS:QRVO Stock Report

Last Price

US$111.07

Market Cap

US$11.5b

7D

4.7%

1Y

-41.0%

Updated

14 Aug, 2022

Data

Company Financials +
QRVO fundamental analysis
Snowflake Score
Valuation5/6
Future Growth5/6
Past Performance2/6
Financial Health5/6
Dividends0/6

QRVO Stock Overview

Qorvo, Inc. develops and commercializes technologies and products for wireless, wired, and power markets worldwide.

Qorvo Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Qorvo
Historical stock prices
Current Share PriceUS$111.07
52 Week HighUS$192.92
52 Week LowUS$90.16
Beta1.35
1 Month Change10.87%
3 Month Change8.34%
1 Year Change-41.03%
3 Year Change55.10%
5 Year Change59.42%
Change since IPO1,350.66%

Recent News & Updates

Aug 13

Qorvo: Around The Sweet Spot

In May 2021, I last wrote about Qorvo as a good opportunity to join the 5G market growth. I was overly enthusiastic. Now, it's different. Qorvo wrongly anticipated demand in the mobile product segment, which led to large costs due to a purchase agreement with a foundry partner. There are some short-term risks regarding luxury goods demand like smartphones, wearables, tablets, and laptops. Over the long term, Qorvo is well-positioned within multiple double-digit growth markets and shows confidence by winning design after design. In May 2021, I over-enthusiastically wrote about Qorvo (QRVO) and rated it as a buy. Here is the link to my article from a year ago. Qorvo, similar to the overall semiconductor market, has had a rough time. When comparing Qorvo with the VanEck Semiconductor ETF (SMH) and iShares Semiconductor ETF (SOXX), Qorvo's maximum drawdown is 53.66%, while SMH and SOXX drawdowns are 38.09% and 39.08%. QRVO data by YCharts I made a mistake back then and gave Qorvo, relative to its industry peers, a buy rating and didn't look at how Qorvo's markets were evolving. Yet, I considered Qorvo as "not cheap" back then. But at the end of my previous article, I wrote the following: With a TTM PE of 27 and an FWD PE of 16, Qorvo is valued lower than the average company in the semiconductor indices. If the investor wants to have a foot in the 5G market and enjoy its growth, Qorvo is definitely a good option. A neutral rating back then would have been more appropriate when considering Qorvo's markets. I recorded this mistake and will work on improving! Thesis Qorvo is operating in growing industries. It experienced a significant backdrop in China which has been its largest market. Demand for Qorvo's 5G mobile solutions broke down, and we'll see why in a later section. While demand in China broke down, demand in other markets in industries remains strong, and the market likely tilted the valuation pendulum too far to the oversold direction creating an opportunity for investors. Demand Misprediction Diminishing demand in China hit Qorvo hard. Management at Qorvo entered a long-term capacity reservation agreement with a foundry during Q2 2021. This is an extract from Qorvo's 2022 annual reports discussing this matter. Extract from Qorvo Quarterly Report (Qorvo Q1 2022) They were concerned about supply constraints and wanted to ensure they had enough capacity. Management falsely predicted the demand for wireless solutions for smartphones, tablets, and laptops after the COVID-19 demand surge. China's quarterly smartphone sales have been in a downtrend since late 2017. China Quarterly Smartphone Sales (Counterpoint Market Pulse) Qorvo's largest market is mobile devices. This includes smartphones, wearables, laptops, tablets, and other devices. The pandemic induced a non-lasting surge in demand around the world. Qorvo benefited from this surge as people worldwide bought themselves new smartphones, laptops, and wearables as they transitioned to working from home. Qorvo's stock price reflects the global demand pattern. At its peak, investors quickly turned around and took their profits. I composed different research diagrams depicting the worldwide demand for smartphones and laptops. Global Smartphone Market Projections (Keyanoush - The Value Bull, Various) Looking at the charts above, smartphone sales (except for a few companies like Apple (AAPL) and Samsung (SSNLF)) are in a slump. The Chinese market hit Qorvo the hardest, as seen from the year-over-year quarterly revenue composition. Qorvo's Revenue Segmentation by Geography (Qorvo Quarterly Report 2022) A year ago, China made up nearly 50% of Qorvo's revenue. Now, it's 27%. The decrease in total revenue is $74mn YoY. China's Zero-COVID policy has resulted in halts in the production of smartphones. The debt crisis is no help for the Chinese consumer as well. Qorvo's other markets were able to dampen the drop. Demand in the US increased by ~20%, in "Other Asia" by ~90%, in Taiwan by ~10%, and in Europe by 20%. Qorvo's revenue mix is concentrated around mobile products. In Q1 2021, Mobile products made up 75% of Qorvo's revenue. This year it's 70%. IDP's revenue increased in revenue and as a share of Qorvo's revenue mix. Qorvo Reportable Segments (Qorvo Quarterly Report) Qorvo Margin Contraction - Capacity Reservation Agreement In Q2 2021, Qorvo entered a capacity reservation agreement with a foundry supplier. Under the agreements, Qorvo must purchase a certain number of wafers at predetermined sales prices for 2022-2025. The total size of this agreement is $1.4bn. Demand evaporated, but Qorvo is bound by the agreement, resulting in impairment and costs of $110mn to Q1 2023. The shortfall in the purchase agreement resulted in an impairment to the prepaid refundable deposit of approximately $13mn in Q1 of 2023. $11mn was recorded for inventory in excess of management's demand forecast, and $86mn is the estimated shortfall over the remaining term of the agreement. QRVO data by YCharts The $110mn increase in costs of goods sold negatively impacted margins. Gross, operating, and net margins took a hit this quarter. Short Term Risks With the ongoing zero-COVID policy in China, the increasing interest rates, and inflation still in the 9% neighborhood, demand for smartphones, wearables, tablets, and laptops is unlikely to rise quickly. The minimum purchase agreement could continue to harm Qorvo over the next few quarters as they increase their inventory levels and potentially impair further costs of the agreement over time. IDP makes up only 30% of Qorvo's revenue, and even with stable to increasing demand in this segment, it cannot sufficiently offset demand in Qorvo's much larger MP segment. Rising inventory means that cash is tied up, and other investments may take a hit over time. We can't be sure about ongoing demand in the next few quarters. Long Term View Qorvo's markets are growing rapidly. It owns crucial patents in the 5G space and won designs with Apple, Samsung, Oppo, Honor, and many more. Qorvo completed MFi certification interoperability for its Ultra-Wideband solutions with the Apple U1 chips. That allows Qorvo to supply the chips for designers of Apple-compatible UWB-enabled accessories. In the electric vehicle space, Qorvo announced (by recently acquired United Silicon Carbide) the new most efficient 750V SiC FET portfolio for power designs. Tesla's cars were the first to deploy Silicon Carbide in their power modules, and the rest of the industry is following suit. As combustion engines are phased out, this market will grow fast. Qorvo won Android front-end module design in the smartphone market and increased its RF front-end revenue share. Smartphone RF Front-End Revenue Share (Counterpoint Research) Samsung's flagship phones and mass-market 5G smartphones use Qorvo's power amplifier module, RF switches, and WiFi 6 front-end modules. Honor, the only smartphone manufacturer in China growing rapidly in the Chinese market, has a strategic partnership with Qorvo for its RF front-end components.

Shareholder Returns

QRVOUS SemiconductorUS Market
7D4.7%0.7%3.2%
1Y-41.0%-5.2%-10.2%

Return vs Industry: QRVO underperformed the US Semiconductor industry which returned -5.2% over the past year.

Return vs Market: QRVO underperformed the US Market which returned -10.2% over the past year.

Price Volatility

Is QRVO's price volatile compared to industry and market?
QRVO volatility
QRVO Average Weekly Movement6.5%
Semiconductor Industry Average Movement8.7%
Market Average Movement7.7%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.2%

Stable Share Price: QRVO is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: QRVO's weekly volatility (6%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19578,900Bob Bruggeworthhttps://www.qorvo.com

Qorvo, Inc. develops and commercializes technologies and products for wireless, wired, and power markets worldwide. The company operates through two segments, Mobile Products, and Infrastructure and Defense Products. It offers mobile devices, such as smartphones, wearables, laptops, tablets and other devices; radio frequency power management integrated circuits, ultra-wideband (UWB) system-on-a-chip (SoC) and system-in-package (SiP) solutions, MEMS-based sensors, antenna tuners, and antennaplexers, as well as discrete multiplexers, duplexers, filters, and switches; and cellular base stations include switch-low noise amplifier (LNA) modules, variable gain amplifiers, integrated power amplifier (PA) Doherty modules, discrete LNAs, and high power GaN amplifiers.

Qorvo Fundamentals Summary

How do Qorvo's earnings and revenue compare to its market cap?
QRVO fundamental statistics
Market CapUS$11.46b
Earnings (TTM)US$816.61m
Revenue (TTM)US$4.57b

14.0x

P/E Ratio

2.5x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
QRVO income statement (TTM)
RevenueUS$4.57b
Cost of RevenueUS$2.45b
Gross ProfitUS$2.12b
Other ExpensesUS$1.30b
EarningsUS$816.61m

Last Reported Earnings

Jul 02, 2022

Next Earnings Date

n/a

Earnings per share (EPS)7.91
Gross Margin46.36%
Net Profit Margin17.87%
Debt/Equity Ratio47.6%

How did QRVO perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is QRVO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for QRVO?

Other financial metrics that can be useful for relative valuation.

QRVO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.8x
Enterprise Value/EBITDA8.7x
PEG Ratio0.5x

Price to Earnings Ratio vs Peers

How does QRVO's PE Ratio compare to its peers?

QRVO PE Ratio vs Peers
The above table shows the PE ratio for QRVO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average44.3x
LSCC Lattice Semiconductor
64.2x23.0%US$8.7b
FSLR First Solar
66.5x54.1%US$12.6b
SWKS Skyworks Solutions
14x11.6%US$18.2b
OLED Universal Display
32.7x15.4%US$6.0b
QRVO Qorvo
14x30.2%US$11.5b

Price-To-Earnings vs Peers: QRVO is good value based on its Price-To-Earnings Ratio (14x) compared to the peer average (44.3x).


Price to Earnings Ratio vs Industry

How does QRVO's PE Ratio compare vs other companies in the US Semiconductor Industry?

Price-To-Earnings vs Industry: QRVO is good value based on its Price-To-Earnings Ratio (14x) compared to the US Semiconductor industry average (21.7x)


Price to Earnings Ratio vs Fair Ratio

What is QRVO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

QRVO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio14x
Fair PE Ratio32.5x

Price-To-Earnings vs Fair Ratio: QRVO is good value based on its Price-To-Earnings Ratio (14x) compared to the estimated Fair Price-To-Earnings Ratio (32.5x).


Share Price vs Fair Value

What is the Fair Price of QRVO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: QRVO ($111.07) is trading below our estimate of fair value ($248.28)

Significantly Below Fair Value: QRVO is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

How is Qorvo forecast to perform in the next 1 to 3 years based on estimates from 22 analysts?

Future Growth Score

5/6

Future Growth Score 5/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


30.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: QRVO's forecast earnings growth (30.2% per year) is above the savings rate (1.9%).

Earnings vs Market: QRVO's earnings (30.2% per year) are forecast to grow faster than the US market (14.5% per year).

High Growth Earnings: QRVO's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: QRVO's revenue (8.9% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: QRVO's revenue (8.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: QRVO's Return on Equity is forecast to be high in 3 years time (27.6%)


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Past Performance

How has Qorvo performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


60.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: QRVO has high quality earnings.

Growing Profit Margin: QRVO's current net profit margins (17.9%) are lower than last year (21.2%).


Past Earnings Growth Analysis

Earnings Trend: QRVO has become profitable over the past 5 years, growing earnings by 60.3% per year.

Accelerating Growth: QRVO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: QRVO had negative earnings growth (-11.3%) over the past year, making it difficult to compare to the Semiconductor industry average (56.1%).


Return on Equity

High ROE: QRVO's Return on Equity (19%) is considered low.


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Financial Health

How is Qorvo's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: QRVO's short term assets ($2.4B) exceed its short term liabilities ($718.5M).

Long Term Liabilities: QRVO's short term assets ($2.4B) exceed its long term liabilities ($2.3B).


Debt to Equity History and Analysis

Debt Level: QRVO's net debt to equity ratio (27.6%) is considered satisfactory.

Reducing Debt: QRVO's debt to equity ratio has increased from 20.1% to 47.6% over the past 5 years.

Debt Coverage: QRVO's debt is well covered by operating cash flow (47.9%).

Interest Coverage: QRVO's interest payments on its debt are well covered by EBIT (16.9x coverage).


Balance Sheet


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Dividend

What is Qorvo current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate QRVO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate QRVO's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if QRVO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if QRVO's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as QRVO has not reported any payouts.


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Management

How experienced are the management team and are they aligned to shareholders interests?

4.1yrs

Average management tenure


CEO

Bob Bruggeworth (61 yo)

8.67yrs

Tenure

US$10,072,684

Compensation

Mr. Robert A. Bruggeworth, also known as Bob, serves as President & Director of Qorvo US, Inc. He has been the Chief Executive Officer and President of Qorvo, Inc. since December 2013. Mr. Bruggeworth serv...


CEO Compensation Analysis

Compensation vs Market: Bob's total compensation ($USD10.07M) is about average for companies of similar size in the US market ($USD12.88M).

Compensation vs Earnings: Bob's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: QRVO's management team is considered experienced (4.1 years average tenure).


Board Members

Experienced Board: QRVO's board of directors are considered experienced (7.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: QRVO insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Qorvo, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Qorvo, Inc.
  • Ticker: QRVO
  • Exchange: NasdaqGS
  • Founded: 1957
  • Industry: Semiconductors
  • Sector: Semiconductors
  • Implied Market Cap: US$11.463b
  • Shares outstanding: 103.20m
  • Website: https://www.qorvo.com

Number of Employees


Location

  • Qorvo, Inc.
  • 7628 Thorndike Road
  • Greensboro
  • North Carolina
  • 27409-9421
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/14 00:00
End of Day Share Price2022/08/12 00:00
Earnings2022/07/02
Annual Earnings2022/04/02


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.