Qorvo stock beat analyst forecasts for both sales and earnings this morning.
The stock outperformed and investors are buying, but sales are still declining, and the stock looks expensive.
Qorvo (NASDAQ: QRVO) stock jumped 10.5% through 10:35 a.m. ET Wednesday after beating analyst forecasts this morning.
Heading into the company’s fiscal Q4 2025 report, analysts forecast Qorvo would earn only $1 per share on sales of $850.5 million. In fact, the company earned $1.42 per share (adjusted for one-time items), and its sales were $869.5 million.
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CEO Bob Bruggeworth described Qorvo’s Q4 performance as “stronger than seasonal” and exceeding “the midpoint of our guidance on revenue, gross margin, and EPS.” But that doesn’t mean the news was entirely good.
Sales declined 7.6% year over year. On the plus side, gross profit margins on those sales improved by 160 basis points year over year to 42.2%. Despite operating costs also declining, the company’s operating profit margin only held steady at 3.2%.
Net income, however, improved dramatically, rising 11x from $0.03 per share a year ago, to $0.33 when calculated according to generally accepted accounting principles (GAAP). That wasn’t as good as the company’s headline “adjusted” earnings number, but it was still a big improvement.
Management noted it generated $171 million in positive free cash flow in the quarter and $485 million for the full fiscal year 2025.
Investors seem pleased with the numbers, and while it’s always tricky to value stocks in the cyclical semiconductor industry, the stock does appear cheap at a price-to-free cash flow ratio of barely 12x. Still, you might want to be cautious before assuming Qorvo is a “buy” based solely on valuation.
Management forecast only $775 million in sales for the current fiscal Q1 2026 after all, and that’s actually 13% less revenue than the company collected in the year-ago quarter, indicating that business…
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