Zacks Industry Outlook Qorvo and RF Industries

For Immediate ReleaseChicago, IL – March 4, 2025 – Today, Zacks Equity Research Equity are Qorvo QRVO and RF Industries RFIL.Industry: Semiconductors - RFLink: https://www.zacks.com/commentary/2424573/2-radio-frequency-stocks-to-watch-in-a-challenging-industryThe Zacks Semiconductors - Radio Frequency industry participants are suffering from a challenging demand environment that has resulted in inventory buildup. Sluggish capital spending by telecom carriers has been a headwind. Industry participants are suffering from heightened global macroeconomic uncertainties. Weakness in end-markets like automotive, industrial and infrastructure has been concerning.Nevertheless, players like Qorvo and RF Industries are benefiting from the continued adoption of WiFi 6E and WiFi 7, as well as the rapid proliferation of the edge IoT, AI data centers and automotive electrification. The growing need for faster connections, low latency and efficient battery life in wirelessly connected devices has been driving the demand for WiFi-enabled hotspots. The democratization of 5G smartphones has been a tailwind for the industry participants.Industry DescriptionThe Zacks Semiconductors - Radio Frequency Industry comprises companies that provide radio frequency solutions, front-end modules, low-noise amplifiers, diodes, multi-chip modules, optical components, surface acoustic wave, bulk acoustic wave technology-based antenna-plexers and film bulk acoustic resonator filters to enable smartphone devices to function more efficiently in congested RF spectrum.They serve a wide array of industries with their solutions, finding ample applications in 5G and smartphone equipment, aerospace and defense, optical networks, cellular base stations, automotive and smart home applications. Most of these companies utilize robust wafer fabrication technologies, as well as ZigBee, Bluetooth Low Energy, Thread, silicon germanium and Gallium Nitride technologies, to stay ahead of the competition.3 Trends Influencing the Prospects of the Semiconductors - RF IndustryAccelerated 5G Deployment Acts as a Tailwind: The rapid implementation of 5G networking infrastructure and the robust adoption of cloud computing applications look promising for the wireless communication market. The coronavirus crisis-induced work-from-home wave has necessitated the need for higher bandwidth and triggered LTE advancements, which is expected to bolster the demand for RF power amplifiers. Increasing RF content in the latest 5G smartphones is a key catalyst. The growing demand for WiFi hotspots, as the number of wirelessly connected devices increases in households, is enhancing industry prospects.Innovation Opens up Business Avenues: The rapid proliferation of IoT, wearables, drones, VR/AR devices, autonomous cars and ADAS is expected to drive the demand for RF semiconductor products beyond smartphone devices, favoring industry prospects. RF Semiconductors are setting the pace for technology modernization by digitizing aspects like connectivity, healthcare, transport and defense.The diversified utilization of RF Semiconductor products bodes well for the industry players. The evolution of semiconductor manufacturing processes from 10 nanometers (nm) to 7 nm, and even 5 nm and 3 nm technology, is anticipated to bolster the industry prospects. The rollout of bands and band combinations has led to considerable design challenges for OEM smartphone manufacturers. Industry participants are looking to address these challenges with a robust range of antenna-plexer portfolios utilizing the BAW technology.Growing Adoption of Electric Vehicles Aids Prospects: Industry players are gaining from the increasing inclusion of their products in electric vehicles (EVs). The market for EVs is expected to expand fourfold by 2027.Zacks Industry Rank Indicates Dim Near-Term ProspectsThe Zacks Semiconductors - Radio Frequency Industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #186, which places it in the bottom 24% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates dim near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are pessimistic about this group’s earnings growth potential. The industry’s earnings estimates for 2025 have moved down by 35.5% since July 31, 2024.Given the dull prospect, there are only a few stocks worth watching in the industry. Before we present the top industry picks, it is worth looking at the industry’s shareholder returns and current valuation first.Industry Lags S&P 500 & SectorThe Zacks Semiconductors - Radio Frequency Industry has underperformed the S&P 500 and its sector over the past year. The industry has declined 41.7% over this period against the S&P 500’s return of 17.1% and the broader sector’s appreciation of 15.2%.Industry's Current ValuationOn the basis of the forward 12-month price-to-earnings ratio (P/E), which is a commonly used multiple for valuing the Semiconductors - Radio Frequency stocks, the industry is currently trading at 15.01X, lower than the S&P 500’s 21.96X and the sector’s 25.26X.Over the past five years, the industry has traded as high as 23.17X and as low as 7.89X, the median being 14.86X.2 Radio Frequency Stocks to WatchRF Industries: This Zacks Rank #2 (Buy) company is benefiting from an expanding portfolio with the addition of applications like small cells, distributed antenna systems, industrial connectivity and DAC thermal cooling, apart from interconnect product offerings. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The strong portfolio, comprising higher value and higher demand products, is expected to help RF Industries achieve sales growth in 2025 and at least a 10% adjusted EBITDA margin.RF Industries’ shares have jumped 56% in the year-to-date period. The Zacks Consensus Estimate for RFIL’s fiscal 2025 earnings has been unchanged at 21 cents per share over the past 30 days.Qorvo: Shares of this Zacks Rank #3 (Hold) company have moved up 3.9% year to date. The growing adoption of WIFI 7 across retail, enterprise and mobile segments, strong emphasis on RF solutions and investment in diverse growth businesses supported net sales in the CSG segment. Product orders for several large domestic and international ground-based radar systems boosted the HPA segment’s revenues. The transition from legacy mechanical systems to active electronic scanning systems is a tailwind.QRVO has introduced highly integrated front-end solutions that simplify and accelerate the implementation of multi-mode, multi-band 4G smartphones and tablets. These new RF Fusion front-end solutions showcase the company's ability to help leading OEMs launch their next-generation flagship devices quickly. Going by dozens of 5G field trials and demonstrations it has engaged in, the acceleration in 5G deployments should be a boon for Qorvo.The Zacks Consensus Estimate for Qorvo’s fiscal 2025 earnings has increased 1.3% to $5.35 per share over the past 30 days.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>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 Report RF Industries, Ltd. (RFIL): 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