U.S.-based chipmaker Qorvo (QRVO) forecasted a strong fourth-quarter performance following upbeat results in the third quarter for FY25. In Q4, the company expects adjusted earnings of $0.90 to $1.10 per share, with sales projected to range between $825 million and $875 million. This surpassed analysts’ expectations of adjusted earnings of $0.88 per share and revenue of $842.1 million. On the flip side, the company flagged that revenue from its largest customer will remain flat or grow modestly in FY26 in its earnings call. Consequently, QRVO shares are trading down by almost 5% in the pre-market trading session on Wednesday.
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Qorvo Outperforms Q3 Forecasts
In the third quarter, Qorvo’s revenue fell by 15% year-over-year to $916.3 million. However, it surpassed analysts’ estimate of $901.6 million. Meanwhile, the adjusted gross margin for the period was 46.5%, up from 43.8% in the same period last year.
The company highlighted strong support from its largest customer in Q3, which accounts for around 50% of its sales. Additionally, Qorvo is focusing on the high-end flagship and premium segments of its Android 5G product lineup, where customers prioritize its unique offerings.
Insights from TipRanks’ Bulls Say, Bears Say
TipRanks’ Bulls Say, Bears Say tool provides insights into analysts’ perspectives on QRVO stock.
Bulls are optimistic about the growth of Qorvo’s radio frequency (RF) business, supporting further expansion. Analysts are also positive about hedge fund Starboard Value involvement in the company. Earlier this month, Starboard Value revealed a 7.7% stake in Qorvo with 7.29 million shares. Morgan Stanley believes this could signal a new path for Qorvo’s earnings recovery, highlighting Starboard’s successful track record with semiconductor companies and its past work with Qorvo, which could drive significant value.
On the flip side, bears are cautious about growing competition in RF components for budget 5G phones, particularly from Chinese suppliers. As a result, Qorvo has chosen to scale back its involvement in this market segment.
Is Qorvo Stock a Good Buy?
As per the consensus rating on TipRanks, QRVO stock has a Hold rating, supported by a total of 20 recommendations. It includes 14 Holds, four Buys, and two Sells. The Qorvo share forecast is $87.47, which is 2% above the current price level.
