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Qorvo (NASDAQ:QRVO) shares rose slightly in pre-market trading on Thursday as investors focused on its better-than-expected guidance. However, investment firm Summit Insights Group downgraded the semiconductor company, citing potential increased competition.
Analyst Kinngai Chan lowered his rating on Qorvo (QRVO) to hold from buy, noting that any outperformance in the second and third-quarters is “driven primarily by content growth at Apple (AAPL).”
And while Chan likes the company’s diversification strategy and thinks it has “sufficient enough catalysts” to outperform through the first-half of next year, an increase in competition from Qualcomm (QCOM), as well as the rise of Huawei and Huawei’s semiconductors in the Android market could pressure the company’s prospects.
In August, Huawei unveiled the 5G Mate 60 Pro, surprising many in the market place.
For the second-quarter, Qorvo (QRVO) earned 99 cents per share as revenue fell 5.2% year-over-year to $1.1B. Analysts had expected earnings of $1.10 per share and $1B in revenue.
Looking to the December quarter, Qorvo (QRVO) expects revenue of $1B, plus or minus $25M, compared to the $991.76M estimate. Adjusted gross margins are expected to be between 43% and 44%, with adjusted earnings per share of approximately $1.65 per share.
Analysts are largely bullish on Qorvo (QRVO). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a HOLD. Conversely, Seeking Alpha’s quant system, which consistently beats the market, rates QRVO a BUY.
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