Qorvo, Inc. (QRVO) stock intrinsic value fair value estimate & owner earnings analysis

Qorvo designs and manufactures radio-frequency (RF) chips and modules. Its products sit inside smartphones (filters, amplifiers and switches in the Advanced Cellular Group), in Wi-Fi, connectivity and power-management products (Connectivity and Sensors Group), and in defense, aerospace, satellite, cable-broadband and base-station equipment (High Performance Analog). Apple, buying through several contract manufacturers, was about 50% of fiscal 2026 revenue (47% in 2025, 46% in 2024) and Samsung about 10%. Pending merger. Qorvo agreed on October 27, 2025 to combine with Skyworks Solutions. Stockholders of both companies approved it on February 11, 2026, and the company expects closing early in calendar 2027, subject to antitrust and foreign-investment approvals. Qorvo holders would receive consideration that includes Skyworks shares, whose value moves with Skyworks' share price. This analysis values Qorvo on its own operating record and does not try to value the deal or the combined company. How we measure earnings. We start from cash generated by operations, remove the swings from receivables, inventory, payables and similar items, and subtract stock-based compensation as a real cost. We also subtract the part of capital spending needed to maintain the plants, not the part that added capacity. Non-cash charges such as intangible amortization and impairments are not deducted, since they are sunk acquisition costs; because of that, the decay of acquired technology is handled in the outlook rather than in the earnings level. On this basis earnings per share were about $1.11 in fiscal 2017 and $3.34 in 2018, then $4.88, $5.22, $9.45, $11.80, $4.68, $4.67, $3.72 and $5.36 for fiscal 2019 through 2026. The 2021-2022 peak years were followed by a fall of more than half. We use fiscal 2019 through 2026 as one full cycle, excluding the earlier years, when the company was still integrating its 2015 merger and spending heavily on factories. The median is about $5.05 per share. Fiscal 2026 owner earnings rose about 44% from a weak fiscal 2025 ($3.72 to $5.36). That rebound was helped by higher gross margin (45.9% versus 41.3%) after the company cut back low-margin mass-market Android phone business, and by the High Performance Analog segment (revenue up 10.7%, operating margin 26.8% versus 17.1%). Fiscal 2026 also benefited from a $41.6 million release of working capital, which we removed. The base case starts at $5.05 with zero growth, below the trailing rate; we do not extrapolate the rebound. Base case, about $47.5 per share. Earnings stay at $5.05 per share for ten years, then fade in equal steps to zero over the next ten. We credit no growth: nothing in the filings is contracted or backlogged in a way that puts future growth in the bag, and defense demand, share gains or margin gains are not certain enough to include. We keep the earnings level for ten years because Qorvo has produced positive owner earnings in every one of the ten years we calculated, through a peak, a trough and an inventory correction, and because Apple has been 46% to 50% of revenue for three consecutive years. After that, no named contract or product extends the story, so it fades. Bear case, about $24.4 per share. Earnings fall to about $3.70 per share (the fiscal 2025 trough) for three years, then shrink 12% a year for the following seventeen. The named risks: Apple is about half of revenue, and the filing states that some of the company's largest end customers also compete with it by designing their own products; Qorvo has written off goodwill and intangibles in each of the last three years ($221 million, $193 million and $82 million in fiscal 2024, 2025 and 2026), which points to acquisitions and product lines that did not earn their cost; and it carries $1.55 billion of senior notes ($850 million due 2029 and $700 million due 2031) that must be refinanced or repaid out of cash flow. Interest is already deducted in the cash flow we use, so debt is reflected here rather than subtracted again. Bull case, about $60.3 per share. Earnings hold at the fiscal 2026 level of $5.36 for fifteen years, then fade over ten. This is the company's own recent performance under current conditions (gross margin 45.9% after exiting low-margin Android phones), not a further improvement. The extra length rests on Qorvo's long record as a supplier to Apple and defense customers; we did not add growth from new markets, product launches or satellite and defense expansion, since those have not yet produced a repeatable multi-year record. What we tested. The base case relies on Apple continuing to purchase at roughly today's level. Apple's share of revenue rose from 46% to 50% in two years, so concentration is increasing, not fading, and we found no filing language that indicates a contract or scheduled reduction; we therefore did not cut the base case but reflected the concentration in the bear case. The share count has fallen from about 111.5 million (fiscal 2022) to 93.5 million (fiscal 2026) through buybacks ($532.6 million spent in fiscal 2026); we did not credit future buybacks as growth. We could not verify from the filings a specific dated contract or revenue commitment beyond the current fiscal year. Margin-of-safety price. The margin-of-safety price is about $28 per share, roughly 15% above the bear case and about 41% below the base case. The margin is wide because the business is a cyclical chip supplier, half of its revenue comes from one customer, and earnings have already swung from $11.80 to $3.72 per share within three years. Values are on a standalone basis; the pending merger could change what holders ultimately receive.