Why Qorvo (QRVO) Stock Is Nosediving

Radek Strnad /
2024/05/02 12:58 pm EDT

What Happened:

Shares of communications chips maker Qorvo (NASDAQ: QRVO) fell 15.2% in the morning session after the company reported first-quarter results and provided revenue guidance for the next quarter, which missed analysts' expectations. In addition, its inventory levels increased. On the other hand, Qorvo posted a strong improvement in gross margin. Its EPS outperformed Wall Street's estimates. While the sales outlook was underwhelming, it is worth acknowledging the return to positive growth recorded during the quarter, attributed to strength in the High-performance analog segment. The Connectivity & Sensors also contributed to the rebound. Overall, this was a mixed but weaker quarter.

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What is the market telling us:

Qorvo's shares are somewhat volatile and over the last year have had 5 moves greater than 5%. But moves this big are very rare even for Qorvo and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The biggest move we wrote about over the last year was 12 months ago, when the stock gained 6.9% on the news that the company reported fourth-quarter results that exceeded analysts' revenue, free cash flow, and earnings per share (EPS) expectations. Inventory levels also improved. However, revenue guidance for the next quarter missed Consensus estimates. Overall, it was a decent quarter for the company.

Qorvo is down 12.1% since the beginning of the year, and at $95.84 per share it is trading 20.3% below its 52-week high of $120.22 from March 2024. Investors who bought $1,000 worth of Qorvo's shares 5 years ago would now be looking at an investment worth $1,248.

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