What’s Behind Qorvo Inc. Stock’s 2x Rise Since 2018?
Qorvo Inc. (NASDAQ: QRVO) stock price jumped almost 2x from $61 in 2018 end to around $115 currently, primarily due to favorable changes in its P/S multiple. Additionally, the company also witnessed a steady rise in revenue over this period, and revenue per share has increased, driven by a drop in the outstanding share count.
In our interactive dashboard, Why Qorvo Stock Moved: QRVO Stock Has Gained 89% Since 2018, we break down the factors behind this move.
(A) Qorvo’s Total Revenue has grown 35% from $3 billion in 2018 to $4 billion on an LTM basis
- Qorvo’s total revenue has seen a steady rise over the past few years, with a gradual increase from $3 billion in FY ’18 to $4 billion in FY ’21, and currently stands at around the same level. (Qorvo’s fiscal year ends in March)
- The company is a leading designer, manufacturer and supplier of radio-frequency systems for applications that drive wireless and broadband communications.
- As of FY ’21, sales from the mobile products segment make up 71% of the company’s sales, standing at $2.86 billion, up from $2.2 billion in FY ’19, a jump of 30% in just two years.
- For details about Qorvo revenues and comparison to peers, see Qorvo (QRVO) Revenue Comparison
(B) Revenue per share (RPS) increased 49% from $23.62 in 2018 to $35.19 currently
- Qorvo revenue rose from $3 billion in 2018 to $4 billion currently, while the outstanding share count decreased from 125.9 million in 2018 to 109.8 million currently.
- Due to this, RPS has risen from $23.62 in FY ’18 to $35.19 currently.
(C) Price-To-Sales (P/S) multiple for Qorvo rose strongly from 2.2x in 2018 to 4.3x by 2021 end, but has pulled back to 3.1x currently, still around 1.4x higher than its 2018 level
- Due to Qorvo’s strong performance between 2018-end to 2021, its P/S multiple rose steadily from 2.2x in 2018 to as high as 4.3x in 2021, on the back of rising investor expectations surrounding a continued rise in demand for the company’s services.
- However, despite the recent jump in sales, current geopolitical tensions have led to increased uncertainty in the broader markets, and the P/S multiple has pulled back, currently standing at around 3.1x.
- For additional details about the company stock returns and comparison to peers, see Qorvo (QRVO) Stock Return Comparison.
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| Returns | Apr 2022 MTD [1] |
2022 YTD [1] |
2017-22 Total [2] |
| QRVO Return | -8% | -27% | 116% |
| S&P 500 Return | -3% | -7% | 97% |
| Trefis Multi-Strategy Portfolio | -4% | -11% | 250% |
[1] Month-to-date and year-to-date as of 4/21/2022
[2] Cumulative total returns since the end of 2016
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