Between Weak iPhones And Ongoing Margin Challenges, Qorvo Can't Catch A Break

I’m sure some Qorvo (QRVO) shareholders will take exception with this, but more and more this company is reminding me of that kid we all know from high school who was uncommonly talented but somehow just never managed to put it together. Management certainly bears some responsibility (particularly for the ongoing challenges in hitting margin targets), but other issues outside of their control like weak iPhone unit sales have undermined some of the positive drivers.

Qorvo shares look undervalued by most metrics I track, but I think it is fair to ask if revenue and margin leverage expectations are still too high, particularly as high-end handsets don’t seem to offer the growth they once did. There are still credible drivers in markets like IoT, wireless infrastructure, and even handsets, but I’d like to see at least another quarter before stepping up and buying these beaten-down shares.

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Between Weak iPhones And Ongoing Margin Challenges, Qorvo Can't Catch A Break

Akoustis Technologies Is A Puzzling Pre-Commercial Tech Story

It may not always be the case that if something seems to good to be true it probably isn’t, but healthy skepticism can be an investor’s best friend. To that end, Akoustis (AKTS) is both intriguing and confounding. While the idea of disruptive technology in the RF filter space is certainly appealing, particularly with an enterprise value of less than $200 million, I think you have to ask why a company with promising technology and no revenue would go public through a reverse merger instead of following the more typical venture-IPO route.

I don’t know whether the worst accusations against Akoustis are true, but I do know that a lot of what they’re attempting to do flies in the face of how business normally works, and I know competition in advanced filters is extremely fierce. It’s true that Akoustis is targeting markets that can support meaningful revenue, but with what I regard as unproven technology, unproven execution capabilities, significant barriers to adoption, and thin financial resources, this is at best a very risky proposition.

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Akoustis Technologies Is A Puzzling Pre-Commercial Tech Story