Qorvo (NASDAQ:QRVO) Will Be One Wild Buy

It might be hard to reconcile how a large number of analysts are expecting a stock's price to fall, substantially, yet at the same time be worth buying, but sometimes, that's exactly the case. That's just what's going on with Qorvo (NASDAQ:QRVO), which is turning in big expectations in pretty much every direction simultaneously.

Big Gains After a Big Drop

Some are calling it the “Qorvo Paradox”. A large number of analysts are bullish on Qorvo shares, and our own research reported that Qorvo has an average rating of “Buy”. Given that our own study found that average comes from 25 separate ratings for the stock—six “hold”, 18 “buy”, and one “strong-buy” ratings—that's a pretty strong recommendation for going ahead with Qorvo purchases.

Our study isn't alone on this front, either; Another study from NASDAQ features an ever-strengthening buy recommendation for Qorvo that's been on the rise for the last three months. NASDAQ's buy recommendations are typically on a scale of one to five, with five being “strong sell” and one being “strong buy.” Three months ago, Qorvo had a rating of 1.74. A month later, it was 1.58. It repeated that score for a second month, and now, the rating stands at 1.47.

Yet there's an unexpected question that emerges in the midst of all that “buy” recommending: Qorvo's price target. Our study's average price target for Qorvo is $124.80. The NASDAQ study's price target, meanwhile, averages $127.81 per share. There are variances in here, of course; Raymond James has its price target set at $140, a recent upgrade from $130. The NASDAQ study features a range from $80 to $160. Oppenheimer recently released a price target of $150.

Qorvo closed yesterday at $131.54, and ever since opening this morning, has been on a downward slide to its current level of $128.66.

Notes From the Fiscal First Quarter

There isn't much from the fiscal first quarter that suggests any kind of problem, either; Revenue for the quarter came in at $787 million, with earnings per share of $0.83 using generally-accepted accounting principles (GAAP). Both of these figures were said to be above guidance, which is usually a positive move.

The company also had some gains from unexpected quarters. It requested an Emergency Use Authorization from the FDA for COVID-19 antibody testing, using sensor technology from Qorvo Biotechnologies. No word came back on how that turned out. The company also made significant advances as part of the still-ongoing 5G rollout, including building 5G base stations, GaN power amplifiers, power management solutions and several other tools.

Finding Its Level

Some might suggest here that Qorvo is actively engaged in finding its level. With consensus estimates looking to bring the company's price down, a sudden drop to the consensus estimate does make some sense.

There is also some word that says insiders are trimming their holdings a bit. Robert A. Bruggeworth, current CEO and President of Qorvo, was spotted just a week ago selling 8,762 shares at a value of $131.38 per share.

The biggest point in favor for Bruggeworth's move is that it doesn't seem to mark a potential big fall. He sold a little under 3% of his total holdings at the time by some figures; that's not a move that screams “I'm trying to bug out of a failing company before it takes all my holdings under with it,” that's a move that moderately suggests “I'm rebalancing my portfolio going into the fourth quarter of the year,” which kicks off in about five weeks. The fact that he sold another 1,324 shares a day later is a little noteworthy, but again, still too small a move to really be unsettling. About 96% of his holdings are still in place.

Modest selling from the CEO, diversified operations, and a wide range of price targets suggest that Qorvo has found its level and is holding therein. The fact that Qorvo has so many different markets to work with, meanwhile, only improves the outlook from there. Those interested in buying in here may want to hold out for a little to make sure the new floor has been found, but get ready to buy in soon thereafter.