It’s been too long since I’ve written on Qorvo (QRVO). I liked the stock back in May of 2019 on the company’s opportunity to benefit from 5G-driven demand for RF front-end components, the underrated IDP segment, and further margin progress. Since then, the shares have risen over 130%, beating the NASDAQ and SOX indexes by wide margins, as well as peers/rivals like Qualcomm (QCOM) and Skyworks (SWKS), though the gap with Skyworks has been much closer of late. Qorvo has also beaten Broadcom (AVGO) by a wide margin, though with that company’s mix, the comparisons aren’t as relevant as they once were.
Hard as it is for me to believe in a market where seemingly every chip stock looks well-valued, Qorvo doesn’t look too expensive here. In fact, I think there’s a reasonable argument that it’s undervalued given low 30%’s operating margins and a revenue growth rate in the low-to-mid teens over the next few years. While there are near-term risks like an inventory correction in the smartphone channel to at least consider, this name is still worth a look.
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Qorvo Still Undervalued On 5G Volumes And Content Growth Opportunities
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