Last update on 2024-06-05

Qorvo (QRVO) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Detailed Piotroski F-Score analysis for 2023. Qorvo (QRVO) has a final score of 5/9, assessing factors like profitability, liquidity, and operational efficiency.

Short Analysis - Piotroski Score: 5

We're running Qorvo (QRVO) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

The Piotroski F-Score evaluates a company's financial health by analyzing nine criteria related to profitability, liquidity, and operating efficiency, scoring between 0 to 9. Qorvo (QRVO) scores a 5 on this scale, indicating a mixed financial position. The firm has shown positive net income and cash flow in 2023, signifying profitability and strong cash generation. However, the return on assets and gross margin have both decreased, pointing to efficiency issues. Additionally, the increased leverage and decreasing asset turnover ratio are negative factors despite an improved current ratio and a reduction in outstanding shares.

Insights for Value Investors Seeking Stable Income

Qorvo's score of 5 out of 9 in the Piotroski analysis suggests the company has both strengths and weaknesses. While it demonstrates good liquidity and profitability aspects, the declining return on assets, gross margins, and increasing leverage could be concerning. It's worth a closer look for potential investors, but caution is advised given the mixed signals. A deeper analysis and comparison with industry peers would provide better insight into whether Qorvo is a solid investment choice.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Qorvo (QRVO)

Company has a positive net income?

Net income is a crucial measure of a company's profitability, reflecting its revenue after expenses, taxes, and costs are subtracted. A positive net income indicates profitability, which is fundamental for business sustainability.

Qorvo (QRVO) has registered a net income of $103,152,000 in 2023, which is positive and hence adds 1 point in the Piotroski score. This positive net income suggests that the company is operating profitably, making it a favorable criterion. Analyzing the historical data over the past 20 years demonstrates inconsistent profitability. For instance, there were years when the net income was negative, such as in 2017 (-$16,558,000), 2016 (-$28,845,000), and 2021 saw a peak with $1,033,352,000. Despite this volatility, the current positive trend is reassuring.

Company has a positive cash flow?

Check if CFO 843231000 in 2023 are postive or negativ. If the CFO is postive add 1 point if not set it to 0.

The CFO for 2023 is positive at $843,231,000. This is a good indicator of the company's ability to generate cash from its core operations. A positive CFO generally suggests efficient operations and good liquidity. Over the last 20 years, Qorvo's CFO has shown a significant upward trend, peaking at $1,301,853,000 in 2021. While there is a decline from the peak, the current figure remains strong. Therefore, Qorvo scores 1 point for this criterion, reflecting its solid cash generation capabilities.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) between the years is a critical indicator in the Piotroski F-Score as it reflects the company's profitability and operating efficiency over time.

Qorvo's ROA in 2023 stands at 0.0145, a stark decline from the ROA of 0.1403 in 2022. Such a significant drop indicates a decrease in profitability and efficiency in utilizing assets to generate earnings. Consequently, Qorvo would receive 0 points for this criterion. Historically, Qorvo's ROA has been considerably volatile; comparing the operating cash flow over the last two decades, a pattern of fluctuating financial health emerges. When contrasted with the industry median, Qorvo's recent performance also appears underwhelming, with the industry median holding relatively steady around 0.4909 in 2023.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income

In 2023, Qorvo's operating cash flow of $843,231,000 significantly exceeds its net income of $103,152,000. This difference suggests that the company is generating strong cash flows from its operations despite the lower net income. This is favorable, indicating good liquidity and earnings quality, and thus adds 1 point in the Piotroski analysis.

Liquidity of Qorvo (QRVO)

Leverage is declining?

Change in leverage assesses the variation in a company's financial debt relative to its equity. It's key for evaluating financial stability.

Qorvo's leverage increased from 0.2726 in 2022 to 0.3061 in 2023, indicating a higher debt-to-equity ratio. Over two decades, leverage fluctuated significantly, peaking at 0.529 in 2009 and hitting lows around 0 in 2014-2015. The recent trend shows a move towards higher leverage, suggesting increasing reliance on debt financing, a potential risk if not align with growth strategies. Thus, this criterion scores 0 points.

Current Ratio is growing?

Current Ratio represents a company's ability to pay off its short-term liabilities with its short-term assets. An increasing current ratio signifies better liquidity position and financial health.

Comparing the current ratio of Qorvo in 2023 (3.6523) with 2022 (3.6287), it is clear that the ratio has increased. This indicates a marginal improvement in the company's liquidity position, and thus we add 1 point to the score. Historical Data: From 2014 to 2023, Qorvo's current ratio has oscillated, reaching highs and lows. The highest current ratio was recorded in 2015 (4.6113), while the lowest was in 2014 (2.4431). The 2023 ratio (3.6523) is higher than the median industry ratio (3.4213), which underscores Qorvo's relatively stronger liquidity. This overall positive trend can be seen as a favorable sign for its short-term financial obligations.

Number of shares not diluted?

The change in outstanding shares signifies changes in ownership dilution and management's capital strategy, impacting shareholder value.

Qorvo saw its outstanding shares decrease significantly from 110,196,000 in 2022 to 102,206,000 in 2023. This marked reduction by approximately 7.3% can be considered a positive trend since a decrease in outstanding shares often signifies share buybacks, which can enhance shareholder value by improving earnings per share and indicating management's confidence in the company. Examining the historical data, Qorvo has notably balanced fluctuations in its share count over the past twenty years, with various rises and declines. The decrease in 2023 thus adds 1 point to the Piotroski score for this criterion.

Operating of Qorvo (QRVO)

Cross Margin is growing?

Gross margin is the proportion of revenue that exceeds the cost of goods sold. It is crucial for understanding profitability trends.

Comparing Qorvo's gross margin in 2023 (0.3634) to 2022's figure (0.4921), it shows a significant decrease rather than an increase. Therefore, according to Piotroski's scoring method, Qorvo would receive 0 points for this criterion. Over the span of 20 years, Qorvo’s gross margin has seen fluctuations but generally ranged between 0.3172 and 0.4921. It's noteworthy that the gross margin for Qorvo in 2023 is considerably lower, suggesting a decline in cost efficiency or price realization. When juxtaposed with the industry median gross margin, which has also shown fluctuations but remained above Qorvo's recent figures, this signals a potential area of concern in Qorvo's operational effectiveness.

Asset Turnover Ratio is growing?

Asset Turnover measures how efficiently a company uses its assets to generate sales and it's vital to track efficiency trends.

The Asset Turnover Ratio for Qorvo (QRVO) has decreased from 0.6308 in 2022 to 0.5027 in 2023. This decline indicates that the company is less efficient in generating sales from its assets this year compared to the previous year. This trend is particularly concerning considering that asset turnover had shown an improving trend from 2016 until its peak in 2014, and this recent drop may suggest potential inefficiencies or challenges faced by the company in effectively utilizing its assets. Given this reduction in efficiency, Qorvo scores 0 points for this criterion in the Piotroski Score analysis.