A month has gone by since the last earnings report for Qorvo (QRVO Quick QuoteQRVO - Free Report) . Shares have lost about 3.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Qorvo due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Qorvo's Q2 Earnings & Revenues Beat Estimates, Up Y/Y

Qorvo reported second-quarter fiscal 2022 non-GAAP earnings of $3.42 per share, which soared 40.7% on a year-over-year basis and surpassed the Zacks Consensus Estimate by 5.2%.

Revenues increased 18.4% year over year to $1.26 billion and outpaced the consensus mark by 0.4%. The company gained from new product launches as well as broad-based strength across customers.

Quarter Details

Segment-wise, Mobile Product (“MP”) revenues of $996 million surged 32% year over year, driven by higher 5G content in smartphones. In MP, the multi-year migration of 5G continues to drive RF content and integration trends.

The company stated that Qorvo enjoys broad exposure to mass market designs at customers like Honor, OPPO, Pixel, Samsung, Vivo and Xiaomi as a preferred supplier.

Infrastructure and Defense (“IDP”) revenues were $260 million, down year over year, primarily due to reduced supply from outsourced assembly and test operations in Malaysia and elsewhere.

Qorvo expects IDP to return to year-over-year growth in the December quarter, and the growth to accelerate in the March 2022 quarter.

Non-GAAP gross margin expanded 70 basis points (bps) from the year-ago quarter to 52.4%, better than management’s guidance, despite supply chain constraints.

Non-GAAP operating expenses increased 1.6% year over year to $222.1 million. As a percentage of revenues, the figure contracted 290 bps year over year to 17.7%.

Non-GAAP operating income surged 32.2% to $435.4 million. Non-GAAP operating margin expanded 360 bps from the year-ago quarter to 34.7%. This can be primarily attributed to gross margin expansion.

Balance Sheet & Cash Flow

As of Oct 2, 2021, cash and cash equivalents were $1.15 billion compared with $1.20 billion reported as of Jul 3, 2021.

As of Oct 2, 2021, long-term debt was $1.741 billion unchanged from the figure as of Jul 3, 2021.

During the fiscal second quarter, the company repurchased shares worth $223 million.

Guidance

For third-quarter fiscal 2022, Qorvo anticipates revenues between $1.09 billion and $1.12 billion, with MP and IDP contributing $830 million and $275 million, respectively.

Non-GAAP gross margin is anticipated between 52% and 52.5%.

Non-GAAP earnings are projected to be $2.75 per share (at the mid-point of the revenue guidance).

Non-GAAP operating expenses are anticipated to increase in the third quarter to approximately $224 million due to higher investments in core technologies and expanding capabilities in new businesses, including the acquisition of the United Silicon Carbide.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -16.43% due to these changes.

VGM Scores

At this time, Qorvo has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Qorvo has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.