Is Qorvo (QRVO) Fairly Priced After Recent Share Price Weakness And Mixed Valuation Signals
- If you are wondering whether Qorvo's share price gives you good value right now, this article focuses on what the numbers say rather than market hype.
- The stock closed at US$82.88, with a 1.9% decline over the last 7 days and a 7.0% decline over 30 days, even though the 1 year return sits at 13.4% and the 5 year return at a 54.9% decline.
- Recent coverage of Qorvo has highlighted its role in the broader semiconductor space and how sentiment around the sector can affect companies with similar profiles. At the same time, ongoing discussions about supply chains, device demand and capital spending have been influencing how investors think about risk and return in this part of the market.
- Qorvo currently has a valuation score of 2 out of 6, so we will look at how different valuation methods treat the stock, then finish by considering a more complete way to think about value beyond any single metric.
Qorvo scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: Qorvo Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model projects a company’s future cash flows and then discounts them back to today using a required rate of return. This gives an estimate of what the business may be worth based on those projected dollars.
For Qorvo, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month Free Cash Flow is about $539.3 million, and analysts plus extrapolated estimates see Free Cash Flow at $630.4 million in 2030, based on a series of annual projections in between. All of these figures are in US$.
When Simply Wall St discounts those projected cash flows back to today, the resulting intrinsic value is roughly US$72.38 per share. Compared with the recent share price of US$82.88, the DCF output indicates that Qorvo is about 14.5% overvalued on this model.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Qorvo may be overvalued by 14.5%. Discover 881 undervalued stocks or create your own screener to find better value opportunities.
Approach 2: Qorvo Price vs Earnings
For profitable companies, the P/E ratio is a useful way to see how much investors are paying for each dollar of earnings. It ties the share price directly to current earnings, which makes it a straightforward cross check against the cash flow based view you saw in the DCF section.
What counts as a “normal” P/E depends on how the market views a company’s growth prospects and risk. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk usually points to a lower multiple.
Qorvo currently trades on a P/E of 35.15x. That sits below the broader Semiconductor industry average of 42.34x, but above its peer group average of 32.38x. Simply Wall St’s “Fair Ratio” for Qorvo is 29.40x, which is a proprietary estimate of what the P/E might be given factors such as earnings growth, industry, profit margins, market cap and risk profile.
This Fair Ratio can be more informative than a simple comparison with industry or peers because it is tailored to Qorvo’s specific characteristics rather than broad group averages. With the current 35.15x P/E sitting above the 29.40x Fair Ratio, this approach points to Qorvo trading on a richer multiple than those fundamentals suggest.
Result: OVERVALUED
P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1445 companies where insiders are betting big on explosive growth.
Upgrade Your Decision Making: Choose your Qorvo Narrative
Earlier we mentioned that there is an even better way to understand valuation, and on Simply Wall St that comes through Narratives. You and other investors link a simple story about Qorvo to a set of numbers like future revenue, earnings, margins and a fair value estimate, then compare that fair value to today’s price to decide whether you see the stock as attractive or not. Everything updates automatically as fresh news or earnings arrive on the Community page. For example, one Qorvo Narrative might lean into potential merger synergies and a fair value near the current analyst consensus of about US$101.78. A more cautious Narrative might instead anchor closer to the lower analyst target of US$70. By seeing these side by side you can quickly spot where your own view sits and whether the current price, recently around US$82.88, lines up with your expectations.
Do you think there's more to the story for Qorvo? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com