Qorvo (QRVO) Down 13.4% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Qorvo (QRVO). Shares have lost about 13.4% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Qorvo due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Qorvo Q3 Earnings Surpass Estimates Despite Lower RevenuesQorvo reported strong third-quarter fiscal 2025 results, with both the bottom line and top line surpassing the respective Zacks Consensus Estimate. The company reported a revenue contraction year over year due to a net sales drop in the Advanced Cellular Group (ACG) vertical. However, solid demand trends in multiple end markets, including defense, aerospace, power management, WiFi and smartphones, cushioned the top-line growth in this quarter.RevenuesNet sales during the quarter declined to $916.3 million from $1.07 billion in the prior-year quarter. Despite significant improvement in inventory levels, demand in various end markets was yet to fully recover, which impeded revenues. Macroeconomic headwinds also impacted the top line. Nevertheless, during the quarter, the company secured major deal wins for its ultra-wideband applications and the state-of-the-art Wi-Fi 7 front-end modules that offer unmatched flexibility in power management and efficiency. The top line beat the Zacks Consensus Estimate of $901 million.HPA contributed $171.7 million in revenues, up from $118.9 million in the year-ago quarter. Net sales beat the Zacks Consensus Estimate of $168.1 million. The company secured new product orders for several large domestic and international ground-based radar systems. The transition from legacy mechanical systems to active electronics scanning systems led to growth in the defense and aerospace business.In power management, the company continues to boast a strong presence in the consumer electronic sector. Healthy traction in automotive also cushioned the top line. The growing demand for DOCSIS 4.0 hybrid power doublers is supporting growth of the infrastructure business.Revenues from CSG were $109.5 million compared with $108.9 million in the year-earlier quarter. The improvement was driven by the growing adoption of WIFI 7 across operator, retail, enterprise, and mobile segments. Strong emphasis on RF solutions and investment in diverse growth businesses, including an expanding portfolio of automotive solutions and SoCs for ultra-wideband Thread, also supported this segment. However, net sales fell short of the Zacks Consensus Estimate of $121.1 million.Net sales in ACG were $635.1 million, down 24.9% year over year, due to seasonal dynamics. However, the top line beat the Zacks Consensus Estimate of $611.2 million.Other DetailsNon-GAAP gross profit declined to $426.3 million from $470.5 million in the year-ago period, with respective margins of 46.5% and 43.8%. Non-GAAP operating expenses increased to $248.4 million from $234 million a year ago, owing to higher investments in new product development. Non-GAAP operating income was $177.9 million, down from $236.5 million in the year-ago quarter.Cash Flow & LiquidityAs of Dec. 28, 2024, QRVO had $769.43 billion in cash and cash equivalents and $1.55 billion of long-term debt. The company generated $214.1 million in net cash from operating activities, with a free cash flow of $176.3 million. Qorvo repurchased $100 million worth of shares at an average price of $73 per share in the quarter.OutlookFor fourth-quarter fiscal 2025, the company expects revenues of about 850 million (+/- $25 million). Non-GAAP gross margin is projected to be between 43% and 44%. Non-GAAP earnings per share are forecasted to be in the range of 90 cents-$1.10. The company expects non-GAAP operating expenses to be approximately $250 million in the March quarter.For fiscal 2025, management anticipates revenues to be slightly down compared to fiscal 2024, owing to two factors affecting the smartphone business. Non-GAAP tax rate is expected to be approximately 11%.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed an upward trend in fresh estimates.The consensus estimate has shifted 51.87% due to these changes.VGM ScoresCurrently, Qorvo has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Qorvo has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Qorvo, Inc. (QRVO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks