Key Stats for Qorvo Stock
- Pre-Market Price change for Qorvo stock: -10.5%
- $QRVO Share Price as of Jan. 27: $83
- 52-Week High: $106
- $QRVO Stock Price Target: $99
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What Happened?
Qorvo (QRVO) stock tumbled 10% in pre-market despite reporting third-quarter results that beat Wall Street expectations. The chipmaker posted adjusted earnings of $2.17 per share on revenue of $993 million, topping analyst estimates of $1.86 per share on $985 million in sales.
The problem? Management’s guidance for the current quarter spooked investors.
- Qorvo expects fiscal fourth-quarter revenue of $800 million, plus or minus $25 million, with adjusted earnings of $1.20 per share, plus or minus 15 cents.
- That revenue midpoint represents a significant sequential decline and came in well below the Street’s expectations.
The weak outlook reflects several headwinds. CEO Bob Bruggeworth said the company is “strategically exiting” the lower-margin mass-tier Android smartphone business.
For fiscal 2027, Qorvo expects Android revenue to decline by approximately $300 million from fiscal 2026, driven primarily by the company’s intentional exit from less profitable segments.
Memory chip pricing and availability issues are worsening the situation. CFO Grant Brown noted that rising DRAM costs are impacting Android OEMs’ build plans, particularly in the mass tier.
Customers are prioritizing scarce memory supply for their higher-end devices, accelerating Qorvo’s strategic exit from the low end but creating near-term revenue pressure.
At Qorvo’s largest customer—widely understood to be Apple—the company expects revenue to be approximately flat in fiscal 2027.
While Qorvo won the high-band module in Apple’s cellular-enabled iPads and continues benefiting from Apple’s internal modem adoption, the company disclosed that it received a “lower share” of ultra-high-band modules for upcoming iPhone models compared to last year.
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What the Market Is Telling Us About Qorvo Stock
The steep decline in Qorvo stock shows investors are concerned about near-term revenue visibility and competitive positioning.
While management is framing the Android business contraction as a strategic choice to improve profitability, the magnitude of the decline caught the market off guard.
Qorvo stock investors also appear worried about content losses at Apple.
Ultra-high-band modules have been a dual-sourced position for years, but losing share on a key socket in the iPhone 18 generation raises questions about the company’s competitive position in integrated modules going forward.
However, there are some bright spots that Qorvo stock bulls can point to.
- Gross margins continue improving, expanding 260 basis points year-over-year in the third quarter to 49.1%.
- Management expects fiscal 2027 gross margins to exceed 50% as the company exits lower-margin Android business and benefits from growth in its High Performance Analog (HPA) segment.
The HPA business is becoming a larger part of the story. Qorvo expects defense and aerospace revenue to reach approximately $500 million in fiscal 2027, meaning this business will soon be larger than Android.
The company is benefiting from programs such as the Golden Dome, F-47 fighters, and next-generation Navy platforms. HPA revenue is growing at double-digit rates with attractive margins.
Qorvo stock could also benefit from operating leverage.
- Management expects fiscal 2027 earnings of approximately $7 per share, implying significant margin expansion even as revenue declines in the mid-single digits.
- The company is aggressively managing operating expenses, which are expected to fall to $240 million to $250 million in the current quarter.
Still, Qorvo stock faces a challenging fiscal 2027 setup with declining revenue, share losses at its largest customer, and continued smartphone market headwinds.
Investors will need to see evidence that the margin improvement story plays out as promised before the stock can regain momentum.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
