Qorvo (QRVO) is sailing higher Friday after media reports revealed activist investor Starboard Value has built a 7.7% stake in the chipmaker, which counts Apple (AAPL) as a customer, worth more than $500 million.
The news first broke late Thursday by the Wall Street Journal, which detailed Starboard's position and its intent to seek changes to boost the company's share price, citing people familiar with the matter. However, details about Starboard's plans were not yet available.
Starboard's position was confirmed this morning in a filing with the Securities and Exchange Commission (SEC).
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Qorvo posted a disappointing performance on and off the price charts in 2024. While its share price plunged 37% over the course of the calendar year, earnings are expected to have fallen 22% for its fiscal year and revenue is projected to be down 2.5%. (The company will disclose its fiscal third-quarter results on January 28.)
Furthermore, it was removed from the S&P 500 Index in December.
Starboard traditionally releases a letter to shareholders detailing their plans for their activist positions on their website shortly after their stakes are revealed, so those details should be available in the near future.
In October, Starboard took a $1 billion stake in pharmaceutical giant Pfizer (PFE) with a similar goal to improve the performance of its share price, which included holding Pfizer's management team accountable. However, no major changes have occurred within Pfizer's management team in the months since and its share price has continued its decline.
Is Qorvo stock a buy, sell or hold?
Given Qorvo's troubles on and off the price charts, it's unsurprising to see Wall Street on the sidelines when it comes to the semiconductor stock.
According to S&P Global Market Intelligence, the average analyst target price for QRVO stock is $91.82, representing implied upside of about 11% to current levels. Meanwhile, the consensus recommendation is a Hold.
Financial services firm Argus Research is one of those firms with a near-term Hold rating on QRVO, though over the long term, the group says the tech stock is a Buy.
"Qorvo's mobility business is benefiting from rising content in Apple devices, inventory normalization, and demand recovery in the Android market in China," wrote Argus Research analyst Jim Kelleher in an October 30 note. "Qorvo is positioned for long-term growth in its mobility, infrastructure, and aerospace markets."
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