QRVOQorvo Inc (NASDAQ:QRVO) announced financial results for the Company’s fiscal 2017 second quarter, ended October 1, 2016. On a GAAP basis, fiscal 2017 second quarter revenue increased 22.1% year-over-year and 23.8% sequentially to $864.7 million.  Gross margin was 36.6%, operating income was $45.4 million, and net income was $11.8 million, or diluted EPS of $0.09.

On a non-GAAP basis, gross margin was 42.8%, operating expenses were $172.9 million, operating income was $196.8 million, or 22.8% of sales, and net income was $170.4 million, or diluted EPS of $1.29. Gross margin decreased sequentially on both a GAAP and non-GAAP basis, due primarily to lower than expected manufacturing yields during a steep product ramp to a large customer.

Bob Bruggeworth, president and chief executive officer of Qorvo, said, “The Qorvo team did an excellent job delivering 22% year-over-year growth and achieving our goal of non-GAAP operating expenses at 20% of sales. At the same time, we made progress advancing core technologies and developing highly integrated Qorvo solutions for large customer opportunities in 2017 and 2018.

“It’s clear we have work to do on gross margin, and we’ve taken steps to address it. We continue to drive toward our operating model, including above-market revenue growth and non-GAAP operating income above 30%.

“Separately, we are pleased to announce that Qorvo’s Board of Directors this week has authorized a $500 million share repurchase program.”

Financial Outlook

Qorvo currently believes the demand environment in its end markets supports the following non-GAAP expectations for theDecember 2016 quarter:

  • Quarterly revenue in the range of $800 million to $840 million
  • Sequential gross margin expansion of 100 to 200 bps
  • A tax rate of approximately 8%
  • Diluted EPS in the range of $1.15 to $1.35 (Original Source)

Shares of Qorvo closed today at $56.74, up $0.68 or 1.21%. QRVO has a 1-year high of $64.80 and a 1-year low of $33.30. The stock’s 50-day moving average is $54.87 and its 200-day moving average is $53.80.

On the ratings front, QRVO stock has been the subject of a number of recent research reports. In a report issued on October 25, Canaccord analyst Michael Walkley reiterated a Buy rating on QRVO, with a price target of $67, which implies an upside of 20% from current levels. Separately, on October 20, Brean Capital’s Mike Burton reiterated a Buy rating on the stock.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Michael Walkley and Mike Burton have a yearly average return of 12.3% and 9.9% respectively. Walkley has a success rate of 56% and is ranked #30 out of 4165 analysts, while Burton has a success rate of 65% and is ranked #114.

Overall, one research analyst has assigned a Hold rating and 4 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $69.33 which is 23.7% above where the stock opened today.

Qorvo, Inc. engages in the provision of core technologies and radio frequency solutions for mobile, infrastructure, and aerospace or defense applications. The company operates through two segments: Mobile Products, Infrastructure and Defense Products. The Mobile Products segment supplies of RF solutions that perform various functions in the increasingly complex cellular radio front end section of smartphones and other cellular devices. The Infrastructure and Defense Products segment supplier of RF solutions that support diverse global applications, including ubiquitous high-speed network connectivity to the cloud, data center communications, rapid internet connectivity throughout the home and workplace, and upgraded military capabilities across the globe. Its products include amplifiers, control products, discrete transistors and integrated circuits, filters and duplexers, frequency converters, integrated modules, optical components, oscillators, passives and switches.