Qorvo pops as Wall Street sees 'cyclical inflection' after strong Q1 results, guidance
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Qorvo (NASDAQ:QRVO) shares rose more than 6% in pre-market trading on Thursday after the semiconductor company reported fiscal first-quarter results and guidance that topped expectations, leading to some praise on Wall Street.
Wells Fargo analyst Gary Mobley, who has an equal-weight rating on Qorvo (QRVO), boosted his price target to $110 from $110 after the results, noting that while inventory levels are still high, but the company may be near a "cyclical and seasonal inflection."
"The Jun-Q could represent both a seasonal & cyclical trough for QRVO, whereby the usual seasonal uplift from Apple drives a q/q recovery into 2Q23 (w/QRVO content gains too)," Mobley wrote in an investor note, adding that Android customers could also be "mostly complete" with inventory draw downs.
However, Mobley said that because of the mature nature of the smartphone market, Qorvo's (QRVO) revenue levels may not return to the heights of fiscal 2022. 
T.D. Cowen analyst Matthew Ramsay also boosted his price target to $110 from $100 following the results and reiterated his market perform rating, noting the quarter is an "encouraging first step" on the road back to recovery.
In addition, Ramsay said that with "strong positioning" at both Apple (AAPL) and Samsung (OTCPK:SSNLF) along with a significant opportunity in Chinese handset makers, a recovery is likely a matter of "when" and not "if."
KeyBanc Capital Markets analyst John Vinh said the results and guidance from Qorvo (QRVO) were "strong" and "solidly beat expectations," but the progress in getting rid of excess Android inventory is helping.
"[Second-quarter revenue] growth of 53% q/q is being driven by iPhone 15 content/share gains in the areas of AT/UHB," Vinh wrote in an investor note. "[Fiscal 2024] guidance of modest [revenue] growth and 44% GM is reiterated, as inventories are expected to normalize exiting [2023]." 
Looking ahead, Qorvo (QRVO) expects fiscal second-quarter revenue to be approximately $1B, plus or minus $15M, significantly higher than the $651.2M it generated in the first-quarter. 
Qorvo (QRVO) also expects adjusted gross margins to be between 45% and 46%, with adjusted earnings per share of approximately $1.75. 
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