On Wednesday, BofA Securities maintained its Underperform rating and $100.00 price target for Qorvo Inc (NASDAQ:QRVO) stock. Following Qorvo's Investor Day, the firm highlighted the company's ambitious plan to expand its customer and product portfolio, aiming for a long-term revenue growth rate of over 10% annually.
Qorvo's management identified a $38 billion serviceable addressable market (SAM), which includes $23 billion from large strategic customers like Apple (NASDAQ:AAPL) and Samsung (KS:005930), and $15 billion from a broader customer base.
The company's strategy involves concentrating future investments on this wider range of customers to drive top-line growth. Qorvo's long-term SAM growth projections include a 5% compound annual growth rate (CAGR) for its Advanced Cellular Group (ACG), rising from $10.1 billion to $12.9 billion between fiscal years 2024 and 2029.
Additionally, the High Performance Analog (HPA) segment is expected to see a 19.3% CAGR, climbing from $6.1 billion to $14.7 billion, while the Connectivity Sensors Group (CSG) is projected to grow at a 20% CAGR, from $4.4 billion to $10.7 billion.
Overall, Qorvo's management forecasts a 13% CAGR in its long-term SAM, increasing from $21 billion in fiscal year 2024 to $38 billion through fiscal year 2029. Despite these optimistic projections, BofA Securities expressed caution regarding Qorvo's ability to successfully execute its diversification strategy and improve margins and market share in a highly competitive environment.
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