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Why Qorvo Stock Jumped Today

By Chris Neiger - Sep 9, 2020 at 2:27PM

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Qorvo's stock spiked after the company raised its second-quarter guidance.

What happened

Shares of Qorvo, Inc. (QRVO 2.16%) popped today after the company said yesterday that it was increasing its earnings and revenue guidance for the second quarter. Investors pushed up Qorvo's stock by as much as 10.2% today.

As of 2:05 p.m. EDT, Qorvo's stock was up 7.6%.  

So what

Qorvo's management said in a press release yesterday that "During the September quarter, broad-based mobile demand for Qorvo's advanced 4G and 5G mobile products is exceeding the company's original expectations."

As a result, the company now estimates that its revenue for the quarter will be in the range of $1 billion to $1.03 billion, up from the previous range of $925 million to $955 million.

An abstract stock chart with numbers in the background.

Image source: Getty Images.

Additionally, Qorvo's management now estimates that second-quarter diluted earnings per share will be $2.14 at the midpoint of guidance, up from the previous estimate of $1.90 per share. 

Investors were clearly happy to see that Qorvo is growing faster in the current quarter than the company initially expected, and pushed up the company's stock as a result.

Now what

Qorvo's stock hasn't benefited in the same ways that many tech stocks have this year. The radio-frequency solutions company saw its share price tumble back in March, along with most stocks, but hasn't made the same gains since then. Qorvo's shares are only up 6.1% this year, barely surpassing the S&P 500's 5.7% gains. With the broader market still experiencing volatility because of COVID-19 and the U.S. recession, investors should expect more volatility from Qorvo's stock in the short term.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool recommends Qorvo. The Motley Fool has a disclosure policy.

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Qorvo, Inc. Stock Quote
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