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Qorvo stock target cut, reiterates neutral stance on decreased forecasts

EditorNatashya Angelica
Published 19/12/2024, 01:28 am
QRVO
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On Wednesday, Mizuho (NYSE:MFG) Securities adjusted its outlook on shares of Qorvo Inc (NASDAQ: NASDAQ:QRVO), a leading provider of innovative RF solutions, by reducing the price target on the company's shares. The new price target has been set to $80.00, down from the previous target of $98.00.

Despite this change, the firm has decided to maintain a Neutral rating on the stock. Currently trading at $70.95, Qorvo shares have declined over 38% in the past six months. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value metrics, with analyst targets ranging from $70 to $135.

The adjustment in Qorvo's price target comes without any alteration to the December quarter revenue and EPS estimates, which remain at $900 million and $1.20, respectively. These figures are in line with the consensus estimates of $901 million in revenue and $1.21 in EPS.

The firm's forecast for Fiscal Year 2025 (F25E) has been slightly revised from $3.67 billion in revenue and $4.94 in EPS to $3.68 billion and $4.82, matching the consensus of $3.68 billion in revenue and $4.82 in EPS.

Looking further ahead, Mizuho has also updated its projections for Fiscal Year 2026 (F26E) and Fiscal Year 2027 (F27E). The revenue expectation for F26E is now $3.82 billion with an EPS of $5.99, slightly above the consensus of $3.83 billion in revenue and $6.00 in EPS.

For F27E, the revenue forecast has been slightly decreased from $4.17 billion to $4.15 billion, with EPS projections adjusting downward from $8.16 to $7.73, which is just below the consensus of $4.16 billion in revenue and $7.77 in EPS.

The rationale behind the reduced price target, as per Mizuho, includes the potential impact of Qorvo losing share in its business with Apple (NASDAQ:AAPL). However, the sale of Qorvo's Silicon Carbide (SiC) business is expected to contribute to improved gross margins (GM) and operating margins (OM), along with lower capital expenditures (capex).

The new price target is based on 13.3 times the firm's estimated earnings per share for Fiscal Year 2026. InvestingPro data reveals the company maintains a "Fair" overall financial health score, with particularly strong cash flow metrics. Subscribers can access 10 additional ProTips and a comprehensive Pro Research Report covering Qorvo's financial outlook and market position.

In other recent news, semiconductor company Qorvo has reported robust Q2 2025 results, with revenues hitting $1,047 million, an 18% increase from the previous quarter, and non-GAAP diluted earnings per share (EPS) of $1.88 surpassing expectations.

Despite this strong performance, Qorvo is forecasting a slight decline in revenue for fiscal 2025 due to shifts in the Android smartphone market. The company is also adjusting its operations and reducing expenses to improve profitability, as highlighted by its recent divestiture of its silicon carbide business.

This strategic move aligns with Qorvo's objective to focus on areas with higher growth potential and profitability. Financial services firm Loop Capital has initiated coverage on Qorvo, assigning a Hold rating and a price target of $73.00, indicating a complex environment for the company. These are among the recent developments for Qorvo.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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