6. Qorvo, Inc. (NASDAQ:QRVO)
Forward P/E as of March 3: ~12.2x
Number of Hedge Fund Holders: 37
Qorvo, Inc. (NASDAQ:QRVO) happens to be a critical player in the broader semiconductor market, which continues to benefit from 5G, automotive, IoT, defense, and AI-driven infrastructure growth. Piper Sandler upgraded the company’s stock from a “Neutral” rating to “Overweight.” The upgrade stems from the improved fundamentals at Qorvo, Inc. (NASDAQ:QRVO), thanks to the involvement of an activist investor, Starboard. Piper Sandler opines that Starboard possesses a strong history of effecting change in similar scenarios, focusing on fields including operational expense efficiencies, capital footprint efficiencies, and strategic divestitures.
Previously, Starboard has initiated activist campaigns at the 13 semiconductor companies, says CNBC. Starboard’s modus operandi in such situations revolves around taking board seats if necessary, instituting a philosophy of discipline resulting in more efficient SG&A and targeted R&D, and helping to improve operating margins, as per CNBC. Piper Sandler remains optimistic about the value creation, which can result from the activist’s involvement. The analysis hints at a significant opportunity for Qorvo, Inc. (NASDAQ:QRVO) to improve its operational efficiency and financial performance.
Investment management company Vulcan Value Partners recently released its Q4 2024 investor letter. Here is what the fund said:
“There were no material contributors to performance. There were three material detractors: Sdiptech AB, Qorvo Inc., and Elevance Health Inc. Qorvo, Inc. (NASDAQ:QRVO) is a leader in radio frequency (RF) systems and power management solutions primarily for mobile phones, wireless infrastructure, aerospace/defense, internet of things, and various other applications. Qorvo lowered near-term guidance largely due to accelerated weakness within its Chinese Android business as customers shifted from mid-tier phones, a market in which Qorvo participates, to entry level phones, a market where Qorvo does not participate. Qorvo continues to execute well in its other mobile markets including Apple and Android’s premium and flagship tiers. Importantly, management’s long-term revenue and margin targets, and confidence in achieving those targets, remain unchanged. We added to our position during the quarter.”
