Qorvo Stock Is Plunging Wednesday: What's Going On?

Qorvo, Inc. QRVO stock is facing heavy selling pressure Wednesday after the company reported second-quarter financial results and issued third-quarter guidance below estimates.

The Details: Qorvo reported adjusted earnings of $1.88 per share, beating analyst estimates of $1.85 per share. In addition, the company reported sales of $1.04 billion, beating analyst estimates of $1.02 billion, per Benzinga Pro.

Qorvo reported a gross margin of 42.6% and operating income of $9.7 million.

“Looking forward, the flagship and premium tiers in the smartphone market are holding up well, however, content and ramp profiles vary by model, and we are experiencing unfavorable mix. We expect this to continue in the second half of fiscal 2025,” said Grant Brown, CFO of Qorvo.

“In addition, in the mid and entry tiers of Android 5G smartphones, mix has shifted toward entry-tier 5G at the expense of mid-tier 5G. In our current view, we don’t expect this mix shift in Android 5G from mid-tier to entry-tier to reverse. As a result, we are taking appropriate actions, including factory consolidation and operating expense reductions as well as focusing on opportunities that align with our long-term profitability objectives. We currently expect full-year fiscal 2025 revenue and gross margin will be slightly down versus fiscal 2024.”

The company issued third-quarter earnings guidance of $1.10 to $1.30 per share versus analyst estimates of $1.92 per share. Qorvo anticipates third-quarter revenue between $875 million and $925 million versus analyst estimates of $1.05 billion, per Benzinga Pro.

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Analyst Changes: Following Qorvo’s quarterly report, multiple analysts adjusted price targets.

• Exane BNP Paribas analyst Karl Ackerman downgraded Qorvo from an Outperform rating to a Neutral rating and set a price target of $80.
• Needham analyst Quinn Bolton maintained a Buy rating on Qorvo and lowered the price target from $135 to $100.
• BofA Securities analyst Vivek Arya maintained an Underperform rating on Qorvo and lowered the price target from $115 to $80.
• Craig-Hallum analyst Anthony Stoss maintained a Buy rating on Qorvo and lowered the price target from $142 to $105.
• Susquehanna analyst Christopher Rolland maintained a Neutral rating on Qorvo and lowered the price target from $115 to $90.
• UBS analyst Timothy Arcuri maintained a Neutral rating on Qorvo and lowered the price target from $115 to $90.
• Piper Sandler analyst Harsh Kumar reiterated a Neutral rating on Qorvo and lowered the price target from $100 to $85.

Price Action: At the time of writing, Qorvo stock was down 26.1% at $74.38, according to data from Benzinga Pro.

Image: Courtesy of Qorvo.