We'd Look Past Qorvo's Near-Term Headwinds in China as Shares Remain Undervalued; FVE Down to $169
Morningstar Analyst Note | Brian Colello, CPA | May 4, 2022
Qorvo reported solid fiscal fourth-quarter results but provided investors with a predictably weak forecast for the June quarter in light of soft smartphone demand in China, which should weigh on Qorvo's revenue for the next two quarters. We lower our fair value estimate to $169 from $190 due to the near-term weakness and tempered long-term growth expectations. We still view no-moat Qorvo as fundamentally undervalued and still anticipate healthy 5G radio frequency chip content gains in the years ahead but would point investors toward narrow-moat Skyworks because of its better execution over the years and its lower exposure to Chinese smartphone OEMs.