Long-established in the Semiconductors industry, Qorvo Inc (QRVO, Financial) has enjoyed a stellar reputation. It has recently witnessed a daily gain of 4.51%, juxtaposed with a three-month change of -29.6%. However, fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Qorvo Inc.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 6/10
- Profitability rank: 6/10
- Growth rank: 3/10
- GF Value rank: 4/10
- Momentum rank: 4/10
Based on the above method, GuruFocus assigned Qorvo Inc the GF Score of 68 out of 100, which signals poor future outperformance potential.
Understanding Qorvo Inc Business
Qorvo Inc represents the combined entity of RF Micro Devices and TriQuint Semiconductor, which merged in January 2015. The company specializes in radio frequency filters, power amplifiers, and front-end modules used in many of the world's most advanced smartphones. Qorvo also has a suite of products sold into a variety of nonsmartphone end markets, such as wireless base stations, cable TV and networking equipment, and infrastructure and military applications. With a market cap of $5.85 billion and sales amounting to $3.79 billion, Qorvo Inc operates with an operating margin of 2.57%.
Growth Prospects
A lack of significant growth is another area where Qorvo Inc seems to falter, as evidenced by the company's low Growth rank. Over the past five years, Qorvo Inc has witnessed a decline in its earnings before interest, taxes, depreciation, and amortization (EBITDA). The three-year growth rate is recorded at -25.6%, while the five-year growth rate is at -6.6%. These figures underscore potential challenges in the company's profitability. Lastly, Qorvo Inc's predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.
Conclusion
Qorvo Inc's financial strength, profitability, and growth metrics, as highlighted by the GF Score, suggest a potential for underperformance. The company's challenges in maintaining growth and profitability, coupled with its low predictability rank, indicate that investors should approach with caution. For those seeking companies with stronger GF Scores, GuruFocus Premium members can explore more options using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
