Qorvo (QRVO:NAS) Fundamental Valuation Report


Fundamental Valuation Report

Qorvo(QRVO:NAS)

Technology:Semiconductors

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$68.11 (USD) 16/05/2019

Weighted Valuation
$71.18 (USD)

Overall Rating
Fairly valued to slightly Undervalued by 4.5%

Valuation Models Analyst Consensus: $85.50 (USD)
(in order of importance) Discounted Cash Flow: $55.13 (USD)
Adjusted Book Value: $60.33 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (QRVO:NAS USD)

Price 68.11
Range 68.05 – 70.00
52 week 55.64 – 86.06
Open 69.65
Vol / Avg. 3.38M/1.8M
Mkt cap 8.36B
P/E 64.87
Div/yield 0.00/0.00
EPS 1.05
Shares 122.79M
Beta 0.00

Company Description

Qorvo represents the combined entity of RF Micro Devices and TriQuint Semiconductor, which merged with one another in 2014. The company specializes in radio frequency filters, power amplifiers, and front-end modules used in many of the world’s most advanced smartphones. Qorvo also has a suite of products sold into a variety of nonsmartphone end markets, such as wireless base stations, cable TV and networking equipment, and infrastructure and military applications.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for QRVO:NAS

Using a discounted cash flow model we generated an intrinsic value of $55.13 (USD) for QRVO:NAS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

QRVO:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $55.13 1% 5% 1% 5%
WACC (or Ke) 12.06 $62.83 $48.96
Terminal Growth Rate 3.00 $49.77 $61.81
Tax Rate 0.03 $58.98 $51.39
Cash Flow 1,062,445,000 $50.83 $59.43
Capital Expenditures -272,795,200 $54.28 $55.98
Long Term Debt 988,625,000 $55.53 $54.73

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $154.29 (USD) for QRVO:NAS. We also generated a valuation of $131.75 (USD) using other metrics and comparables.
The comparable companies were Microchip Technology (MCHP:NAS), Silicon Laboratories (SLAB:NAS), Maxim Integrated Products (MXIM:NAS), Cypress Semiconductor (CY:NAS) and Monolithic Power Systems (MPWR:NAS).

Company QRVO:NAS End Date Value
Earnings/Share $1.05 (USD)
Book Value/Share $37.28 (USD)
Sales/Share $24.04 (USD)
Cash Flow/Share $6.90 (USD)
EBITDA/Share $0.00 (USD)
Price Based on Comps Adjustment Factor (%)
$54.33 (USD) 0.0
$240.52 (USD) 0.0
$153.34 (USD) 0.0
$168.95 (USD) 0.0
$0.00 (USD) 0.0
QRVO:NAS Ratios Used Average Values MCHP:NAS SLAB:NAS MXIM:NAS CY:NAS MPWR:NAS
164.37 PE Ratio 51.74 75.67 75.82 23.72 17.53 65.98
2.03 PB Ratio 6.45 4.59 4.41 9.83 2.96 10.47
3.15 PS Ratio 6.38 4.97 5.57 6.80 2.62 11.93
10.96 PCF Ratio 24.50 15.31 25.83 21.21 12.78 47.37
12.22 EV to EBITDA 27.07 23.24 32.15 15.05 15.41 49.51

Multiples

Using a multiples approach we generated a valuation of  $86.87 (USD) for QRVO:NAS

Company QRVO:NAS End Date Value
Earnings/Share $1.05 (USD)
Book Value/Share $37.28 (USD)
Sales/Share $24.04 (USD)
Cash Flow/Share $6.90 (USD)
EBITDA/Share $6.21 (USD)
Price Based on Comps Adjustment Factor
$148.88 (USD) 0
$61.99 (USD) 0
$70.48 (USD) 0
$78.20 (USD) 0
$74.81 (USD) 0
Ratios Ratio Average
PE Ratio 141.79
PB Ratio 1.66
PS Ratio 2.93
PCF Ratio 11.34
EV to EBITDA 12.05

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  QRVO:NAS for the last 3 years was  1.66

We ran the Adjusted Book Value for  QRVO:NAS and generated a book value of  $36.24 (USD)
By multiplying these we get an adjusted valuation of  $60.33 (USD)

Analyst Data

In the Stockcalc database there are 4 analysts that provide a valuation for QRVO:NAS. The 4 analysts have a concensus valuation for QRVO:NAS for 2020 of $85.50 (USD).

QRVO:NAS Qorvo

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 5 0 3.3333 Hold 2019-5-16

Current Price: 68.11 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 5.74 5.96 6.79
# EPS Analysts 5 5 5
Mean Revenue 3,088.10 3,219.70 3,414.50
# Revenue Analysts 5 5 5
Mean Target Price 85.50
Mean Cash Flow 7.10 7.99 8.99
Mean EBITDA 636.50 849.40 1,031.50
Mean Net Income 729.30 737.10 831.10
Mean Debt Outstanding -72.90 -271.60 -583.70
Mean Tax Rate 7.50 8.40 8.40
Mean Growth Rate 9.51
Mean Capital Expenditure 230.80 245.80 279.00

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.
The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).
The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.
With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.
If we have Analyst coverage for the company we use the consensus target price here.

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