QRVO
Qorvo, Inc.
$114.17
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 149.1% above fair value
You pay
$114.17
Bear
$34.37
Fair
$45.82
Bull
$57.28
Bear
$34.37
-69.9%
$2.86 × 12x
Fair
$45.82
-59.9%
$2.86 × 16x
Bull
$57.28
-49.8%
$2.86 × 20x
Adjust Assumptions
16.0x
2.86$
Key Value Driver
Through-cycle normalized EPS ($2.86)
Implied Market Multiple
39.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (42 analysts)
$94.00
Divergence from AlphaVal
51%
Summary
Using 7-year normalized EPS of $2.86 at a 16x cycle multiple, the base-case value is $45.82 per share. P/TBV cross-check: 11.6x.
Warnings
Price-to-book value of 11.6x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $94.00 (from 42 analysts). Our estimate is 51% below the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing