Qorvo Still Tied To Apple's Fortunes, And Now Intel's As Well?
Stephen Simpson, CFA
Stephen Simpson, CFA
Qorvo: With Less Apple, Life May Still Be Healthy
Darspal S Mann
Darspal S Mann
The Coming Reset In RF IC Sector
SunnyInPDX • 89 Comments
SunnyInPDX • 89 Comments
The Coming Reset In RF IC Sector
SunnyInPDX • 89 Comments
SunnyInPDX • 89 Comments
Tue, Jul. 5, 5:38 PM
Tue, Jul. 5, 10:18 AM
- Cirrus Logic (NASDAQ:CRUS) is off 7.4% and Skyworks Solutions (NASDAQ:SWKS) down 5.6% as Pacific Crest downgrades both to Sector Weight amid some disappointing iPhone supply chain forecasts.
- Qorvo (QRVO -5.5%) and InvenSense (INVN -5.1%) are down as well.
- Pac Crest has a fair value range of Cirrus Logic of $33-$36 (vs. its previous close of $38.04) and for $60-$67 on Skyworks (vs. previous close of $62.60).
- It also cut price targets on Analog Devices (ADI -1.7%) to $60 from $62 (7.7% upside); Broadcom (AVGO -2.5%) to $180 from $185 (19.7% upside) and Qualcomm (QCOM -1.3%) to $59 from $61 (12.8% upside).
- "Our lowered estimates reflect a much more disappointing second-half 2016 iPhone 7 ramp than what we had previously expected, as feedback from Asia indicates units are expected to be down 15% to 20% as compared to the iPhone 6s, as Apple appears to be taking a much more cautious view of the ramp," the analysts wrote.
Thu, Jun. 9, 2:28 PM
- Believing the stock "deserves to trade at a discount or 11x P/E vs. last three year average of 12.5x," Citi's Atif Malik has downgraded Skyworks (SWKS -1.7%) to Sell, and cut his target by $4.50 to $65.
- Malik notes Skyworks has relatively high exposure to the iPhone 6S, whose sales have been pressured. He also cites a "lack of premium [RF] filters to address faster growing carrier aggregation market," and concerns about "increasing dual sourcing led competition in the low band market where SWKS participates." He could become positive on Skyworks if it makes further progress in lowering its dependence on mobile (still responsible for 80% of sales).
- Rival Qorvo (QRVO -0.4%) has simultaneously been upgraded to Neutral, after "discussions in Asia indicate improved execution on integration/share gains and higher proliferation of carrier aggregation design wins." Malik adds Qorvo gained content share with the Galaxy S7 and iPhone SE. "Fundamentally, we view carrier aggregation as a key theme for RF stocks with QRVO better positioned to expand its $ growth opportunity based on its comprehensive suite of products including BAW filters."
Thu, May 12, 10:53 AM
- A 2.4% decline in Apple (NASDAQ:AAPL) -- making a fresh 52-week low today -- is being tied to the Nikkei report pointing to a rough year for iPhone suppliers.
- Nikkei's report said that chip shipments from Taiwan Semiconductor Manufacturing (TSM -1.2%) -- will be 70-80% of 2015 second-half levels.
- CNBC is saying that Apple's decline today makes Google parent Alphabet the largest U.S. company by market value, at about $498.6B.
- Meanwhile, among Apple's suppliers, steep declines are prevalent today: AVGO -2.2%, SWKS -3.9%, QRVO -2.9%.
- Shares in Apple are down 14.3% YTD, and down 28.4% over the past 12 months.
- Now read Apple: Nikkei Declares iPhone 7 Dead Before Arrival »
Thu, May 5, 9:12 AM
- Gainers: SYNC +143%. LGCY +31%. AAWW +27%. EPE +21%. FCEL +19%. WTW +15%. DNR +14%. ZNGA +14%. CHK +13%. BCEI +12%. UNXL +12%. ARRS +10%. CRC +10%. CLMT +9%. ORIG +9%. QRVO +8%. GSV +8%. HMY +8%. VNR +7%. MEET +7%. SDRL 7%. CLR 6%. SGYP 6%. OAS 5%. REGN 5%. BABA 5%. AUY 5%.
- Losers: PTX -37%. FRSH -27%. SQNM -19%. FIT -13%. EBIO -11%. LB -10%. WFT -9%. SEAS -8%. ABC -8%. CTL -5%.
Wed, May 4, 4:06 PM
Tue, Apr. 26, 5:19 PM
- Apple (down 7.8% after hours) missed FQ2 estimates and guided for FQ3 revenue of $41B-$43B, below a $47.32B consensus. iPhone unit shipments fell 16% Y/Y to 51.2M, and iPad shipments 19% to 10.3M. Both figures were a little better than expectations. However, guidance points to another large Y/Y iPhone decline in FQ3.
- Cirrus Logic (down 4.2%) beat FQ4 estimates, but guided for FQ1 revenue of $220M-$250M, below a $257.5M consensus. Apple accounted for 62% of FQ4 revenue, and another customer (believed to be Samsung) 17%.
- Skyworks (NASDAQ:SWKS) is down 5.2% after hours. Qorvo (NASDAQ:QRVO) is down 5%. Broadcom (NASDAQ:AVGO) is down 3.8%. Qualcomm (NASDAQ:QCOM) is down 2.4%. NXP (NASDAQ:NXPI), which rallied earlier today thanks to a Q1 beat and solid Q2 guidance is down 2.5%. Nasdaq futures are down 0.9%.
Tue, Mar. 8, 2:36 PM
- Skyworks (SWKS -3.1%), Qorvo (QRVO -3.5%), and Jabil (JBL -3.8%) are among the ZTE suppliers selling off after the Chinese phone/telecom equipment vendor got hit with U.S. sanctions over the alleged re-exporting of controlled items to Iran. Qualcomm and various optical component vendors are also off. The Nasdaq is down 0.6%.
- The sanctions, which have stoked fears of Chinese retaliation, require U.S. ZTE suppliers to apply for an export license. The Commerce Department says it's operating under a "policy of presumption of denial" for granting licenses.
- Bloomberg estimates Jabil's quarterly ZTE sales total ~$35M. Rosenblatt's Jun Zhang sees a major hit to Qualcomm (NASDAQ:QCOM) and Skyworks' sales. "ZTE sold 55M smartphones in 2015, and we think the halt on order shipments will affect at least 25-30M units for 2Q16 and 3Q16, even though other smartphone OEMs will take market share away from ZTE. The impact to Skyworks and Qualcomm would be around $100-200M and $300-500M, respectively." Some of those sales, of course, could be picked up by rivals also buying from Qualcomm and Skyworks.
Fri, Mar. 4, 12:21 PM
- Skyworks (SWKS +6.3%) and Qorvo (QRVO +3.2%) are rallying after Broadcom (AVGO +6.9%) - known as Avago before closing its merger with Broadcom last month - beat FQ1 estimates and issued solid FQ2 guidance in spite of ongoing worries about weak iPhone sales in particular, and soft high-end smartphone demand in general. The guidance excludes businesses from classic Broadcom that the new Broadcom plans to sell, and which produced an estimated $295M in FY15 revenue.
- Possibly helping: Broadcom stated on the earnings call (transcript) it expects FQ2 to be "the trough for our wireless businesses for the rest of the fiscal year," and says it has already begun "pre-building in significant quantities" FBAR filters to support a 2H16 product cycle ramp with its North American customers (i.e. the iPhone 7).
- Broadcom added it expects "a substantial increase in our content" with the iPhone 7, and that also increased RF content with new flagship phones launched by its top Korean client (i.e. the Galaxy S7/S7 Edge). Wireless sales are expected to make up 23% of FQ2 revenue.
- The company also offered an upbeat outlook for its wired infrastructure ops, which (thanks to the addition of the old Broadcom) are expected to account for 55% of FQ2 sales. Growing ASIC sales for base stations and data center switches, higher ASSP sales for enterprise networking applications, last-mile fiber and DSL deployments, and a seasonal set-top refresh are expected to provide a lift.
- Enterprise storage, by contrast, is expected to be hurt by "seasonal declines" in hard drive and storage demand. Industrial chip sales are expected to rise slightly following an FQ1 shipment drop blamed on "lingering uncertainty in industrial end-markets." Storage and industrial are respectively expected to make up 17% and 5% of FQ2 sales.
- Canaccord's Mike Walkley (Buy, target hiked by $10 to $185) is pleased with Avago's implied earnings guidance, which benefits from M&A synergies and the planned asset sales. "We believe management will continue to execute on the recently closed Broadcom acquisition and achieve synergy targets given management’s strong track record in integrating acquisitions."
- Update: Along with its earnings/guidance, Broadcom has disclosed (through an 8-K filing) it plans to cut 1,900 jobs, and record $650M in related charges through FY18. Major post-merger job cuts were generally expected.
Wed, Feb. 17, 9:11 AM
- Qorvo (NASDAQ:QRVO) is launching a $500M accelerated buyback with BofA that's expected to be finished in the first quarter of FY17 (calendar Q2 of 2016). The purchases will count towards the $1B buyback Qorvo announced in November.
- The RF chipmaker has been aggressively buying back shares. $250M was spent on buybacks in FQ3 (calendar Q4). $400M and $200M buybacks were previously completed in 2015. $1B in debt was raised in November to finance Qorvo's most recent program.
- QRVO +2.5% premarket to $41.80.
Tue, Feb. 16, 3:05 PM
- Plenty of tech companies are posting outsized gains on a day the Nasdaq is up 2%. Not surprisingly, many of the standouts are companies that have been hammered since New Year's.
- Notable gainers include action camera leader GoPro (GPRO +12.9%) and GoPro video processor supplier Ambarella (AMBA +6.2%), threat-prevention tech provider FireEye (FEYE +11.2%), supercomputer maker Cray (CRAY +19.5%), chip packaging/testing firm ChipMOS (IMOS +17.8%), point-of-sale hardware/software firm NCR (NCR +9.7%), Web hosting/domain registration firm GoDaddy (GDDY +9%), and driver-assistance system provider Mobileye (MBLY +7.4%). FireEye fell on Friday in the wake of its Q4 report.
- Other big gainers: RF chipmakers Skyworks (SWKS +6.4%) and Qorvo (QRVO +8.9%), 4G modem/M2M module maker Sierra Wireless (SWIR +8%), microcontroller/flash memory maker Cypress Semi (CY +7.5%), microphone maker Knowles (KN +8%), inventory-tracking hardware firm Zebra Technologies (ZBRA +8.5%), cloud HR software firm Paylocity (PCTY +7.8%), cloud collaboration/chat software firm Atlassian (TEAM +10.5%), touch controller/display driver vendor Synaptics (SYNA +7.8%), and online P2P lender LendingClub (LC +14.2%). LendingClub rallied last week after posting a Q4 beat and announcing a $150M buyback.
- Previously covered: Solar stocks, Chinese tech stocks, Groupon, Sonus, Black Box, Canadian Solar, Palo Alto Networks, Qualcomm
Wed, Feb. 3, 10:42 AM
- Goldman's Toshiya Hari has downgraded Qorvo (NASDAQ:QRVO) to Neutral ahead of tomorrow afternoon's FQ3 report. His target is $42.
- Hari: "Qorvo’s closest competitor is Skyworks, and similar to SWKS, the stock is down 22% YTD underperforming the SOX by 1500bps, and is now trading near trough multiples; however we favor Skyworks (Buy) given its better return profile (Q1 vs Q4 for Qorvo on our scorecard), shareholder return (64% of FCF) and concern over whether Qorvo can execute on its mid-term targets."
- Qorvo is selling off on a morning the Nasdaq is down 1.9%. The RF chipmaker is a month removed from issuing an FQ3 warning and providing light FQ4 guidance. Last week, Skyworks posted an FQ1 beat and issued soft FQ2 guidance.
- Qorvo now only trades for 7.2x an FY17 (ends March '17) EPS consensus of $5.00. The consensus was at $5.46 prior to the warning.
Tue, Feb. 2, 2:42 PM
- On a day the Nasdaq is down 2.1%, many chip stocks are seeing outsized losses (SOXX -3.1%) after IDT (IDTI -28.3%), a mixed-signal chipmaker selling into the server, networking/telecom infrastructure, and wireless charging markets (among others), offered soft FQ4 (calendar Q1) guidance to go with an FQ3 sales beat.
- Major decliners include diversified European chipmakers NXP (NXPI -4.7%) and STMicroelectronics (STM -7%), microcontroller maker Cypress Semi (CY -6.9%), RF chipmaker Qorvo (QRVO -6.4%), motion sensor developer InvenSense (INVN -6%), chip packaging/testing firm Amkor (AMKR -6.1%), and analog/mixed-signal chipmakers MagnaChip (MX -9.8%), Inphi (IPHI -9.1%), Silicon Labs (SLAB -5%), Microsemi (MSCC -4.4%), Semtech (SMTC -5.4%), and Power Integrations (POWI -5.5%). Previously covered: Pixelworks, ON Semi.
- IDT reported Chinese telecom infrastructure demand is "normalizing to slightly less than the peak levels seen in late calendar 2014," that data center customer growth rates have slowed slightly, and that consumer demand has been affected by increased "customer smartphone shipment volatility." Both Apple and Samsung's sales have been under pressure.
- BofA/Merrill has downgraded IDT to Neutral, while Wedbush's Betsy Van Hees has gone contrarian and upgraded to Outperform. Van Hees argues IDT is still positioned to see strong FY17 growth, aided by the ramp of LRDIMM DRAM chipsets for Intel's Broadwell server CPU launch and the ramp of wireless charging IC programs at tier-1 OEMs.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Fri, Jan. 29, 3:27 PM
- Several Apple suppliers are seeing major gains after iPhone power amplifier supplier Skyworks (SWKS +5.5%) and iPhone LCD driver IC supplier Synaptics (SYNA +10.6%) delivered their calendar Q4 reports yesterday afternoon - Skyworks beat estimates, while Synaptics (initially lower) missed on sales and beat on EPS.
- Both companies provided soft Q1 guidance (I, II) - Synaptics also suggested it's seeing weakness at multiple top smartphone OEMs . But with nearly every other iPhone supplier to have reported (not to mention Apple itself) having also guided light, shares are rallying nonetheless.
- Big gainers include mobile DRAM supplier Micron (MU +11.1%), microphone supplier Knowles (KN +11.2%), motion sensor supplier InvenSense (INVN +7.5%), audio codec chip supplier Cirrus Logic (CRUS +6.6%), NFC chip/motion co-processor supplier NXP (NXPI +5.9%), and RF chip suppliers/Skyworks rivals Qorvo (QRVO +6.8%) and Avago (AVGO +5.6%). The Nasdaq is up 1.8%.
- Micron could also be getting a lift from the market-pleasing reports delivered by hard drive giants Seagate and Western Digital, given Micron is exposed to many of the same end-markets as Seagate/Western.
Cirrus Logic is adding to the big Thursday gains seen after the company provided encouraging FY17 comments in its FQ3 earnings call. InvenSense has more than recovered the Thursday losses seen after the company provided soft FQ4 guidance and suggested it had lost share at Samsung.
- Possibly helping Synaptics out: When asked about M&A reports on the earnings call, CEO Rick Bergman didn't quite shoot them down. "[W]e're not going to comment on rumors or market speculation ... at the end of the day it is our job to maximize shareholder value so we'll listen to any great ideas that can do that and evaluate them appropriately."
Meanwhile, Bergman asserted Synaptics' TDDI (integrated touch controller/display driver) sales are due to ramp strongly thanks to numerous design wins at top LCD panel makers, and that its ClearForce pressure-response tech will be "a significant differentiator" for Synaptics' TDDI offerings.
Thu, Jan. 28, 5:21 PM
- Skyworks (NASDAQ:SWKS) FQ1 beat is accompanied by guidance for FQ2 revenue of $775M and EPS of $1.24, below a consensus of $817.8M and $1.33. However, with Apple having issued light calendar Q1 guidance and many fellow iPhone suppliers (including rival Qorvo) having warned and/or issued soft guidance, the outlook is being taken in stride.
FQ1 details: Margin gains continue boosting EPS: Non-GAAP gross margin rose 470 bps Y/Y to 51.4%. FQ2 GM guidance is at 50.5%-51%. GAAP operating expenses rose 12% Y/Y to $141.6M. Skyworks ended FQ1 with over $1.2B in cash and no debt.
New non-mobile design wins included Volkswagen telematics systems, GM vehicle-to-vehicle communications sockets, Google's Chromecast HDMI stick and Nest security cameras, and Roku set-tops.
- Qorvo (NASDAQ:QRVO) is up 2.3% after hours. Avago (NASDAQ:AVGO) is up 1.3%.
- Skyworks' FQ1 results, earnings release
Wed, Jan. 27, 8:18 AM
- Though expectations were low following warnings from Cirrus Logic, Qorvo, Analog Devices, and others, iPhone/iPad suppliers are down after Apple missed FQ1 (calendar Q4) revenue estimates (while beating on EPS), and offered soft FQ2 guidance - revenue of $50B-$53B vs. a $55.6B consensus and year-ago sales of $58B.
- FQ1 iPhone sales of 74.8M were close to Street expectations, but iPad and Mac shipments (16.1M and 5.3M, respectively) were below. On its earnings call, Apple mentioned forex swings and Chinese macro pressures are weighing on sales.
- Cirrus Logic (NASDAQ:CRUS), which reports this afternoon, is down 2% premarket. Qorvo (QRVO - reports Feb. 4) -2.7%, Skyworks (SWKS - reports tomorrow) -2%, Analog Devices (NASDAQ:ADI) -3%. Apple (NASDAQ:AAPL) itself is down 3.7%. Nasdaq futures are off 0.7%.
Qorvo, Inc. engages in the provision of core technologies and radio frequency solutions for mobile, infrastructure, and aerospace or defense applications. Its products include amplifiers, control products, discrete transistors and integrated circuits, filters and duplexers, frequency converters,... More
Industry: Semiconductor - Integrated Circuits
Country: United States
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