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Qorvo (QRVO) Shows Potential: Should You Buy the Stock?

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Shares of Qorvo, Inc. (QRVO - Free Report) went up more than 5%, yesterday, outperforming the industry. Notably, the indicators of a stock’s bullish run include a rise in its share price and strong fundamentals.

Rising Share Price

Qorvo has been clocking solid returns on a year-over-year basis and surged approximately 24.2%, against the industry’s loss of 2.1%.

Upward Estimate Revisions

In the last 30 days, the Zacks Consensus Estimate for Qorvo’s fiscal 2019 witnessed upward revisions. The Zacks Consensus Estimate for fiscal 2019 is pegged at $5.93 per share, up from $5.46 per share projected over the same time frame.

Earnings Discussion

Qorvo delivered splendid fourth-quarter fiscal 2018, and provided overwhelming first-quarter and fiscal 2019 outlook. The results reflected an improved demand environment in China. The company benefited from increased demand in the performance-tier for RF Flex and RF Fusion based solutions as well as for antenna tuning, discrete components and BAW-based multiplexers.

Positive Earnings Surprise History

The company outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a positive average earnings surprise of 5.1%. Additionally, the stock has long-term earnings per share growth rate of 12.9%.

Other Driving Factors

Qorvo is a leading provider of core technologies and RF solutions for mobile, infrastructure and aerospace/defense applications. The company is benefiting from increasing demand in the performance-tier for RF Flex and RF Fusion based solutions as well as for antenna tuning, discrete components and BAW-based multiplexers. Improved demand environment in China is a positive. Expanding portfolio also bodes well for Qorvo. The company’s 5G and GaN solutions hold promise.

Moreover, according to a MarketsandMarkets report, the GaN power device market is projected to grow at CAGR of 29.1% to reach $1.89 billion by 2023. The base year 2017 valuation was $0.408 billion and the time period under consideration is 2017-2023.

Introduction of the new products strengthens Qorvo’s GaN portfolio and provides it a competitive edge, in the relevant market. The company is capitalizing on the lucrative prospects in defense by rendering effective GaN solutions.

Bottom Line

Considering these positives, we believe that Qorvo is one technology stock that deserves a place in investors’ portfolio. Consequently, investing in this stock can yield returns in the short term.

Zacks Rank & Other Stocks to Consider

Currently, Qorvo carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader technology sector include NVIDIA Corporation (NVDA - Free Report) , Micron Technology, Inc. (MU - Free Report) and NetApp, Inc. (NTAP - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA, Micron and NetApp have a long-term expected EPS growth rate of 10.3%, 8.2% and 13.8%, respectively.

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