Zacks Industry Outlook Qorvo and RF Industries

Industry Overview - The Zacks Semiconductors - Radio Frequency industry is currently facing a challenging demand environment, leading to inventory buildup and sluggish capital spending by telecom carriers [1][9] - Heightened global macroeconomic uncertainties and weakness in end-markets such as automotive, industrial, and infrastructure are concerning for industry participants [1] Key Trends - Accelerated 5G deployment is acting as a tailwind, with the rapid implementation of 5G infrastructure and increased demand for RF power amplifiers due to higher bandwidth needs [5] - Innovation in IoT, wearables, drones, and autonomous vehicles is expected to drive demand for RF semiconductor products beyond smartphones [6] - The growing adoption of electric vehicles (EVs) is aiding industry prospects, with the EV market expected to expand fourfold by 2027 [8] Current Performance - The Zacks Semiconductors - Radio Frequency industry has underperformed the S&P 500 and its sector over the past year, declining 41.7% compared to the S&P 500's return of 17.1% [13] - The industry's current valuation is at a forward 12-month price-to-earnings ratio of 15.01X, lower than the S&P 500's 21.96X and the sector's 25.26X [14] Company Highlights - RF Industries, with a Zacks Rank 2 (Buy), is expanding its portfolio with applications in small cells and industrial connectivity, expecting sales growth in 2025 and at least a 10% adjusted EBITDA margin [15][16] - Qorvo, with a Zacks Rank 3 (Hold), has seen a 3.9% increase in shares year-to-date, benefiting from the adoption of WiFi 7 and strong demand for RF solutions [17][19]