Would expect the stock to trade up somewhat initially on positive analyst comments with regards to gross margins but should come in later in the session as institutional investors will start to unload shares into the strength given that there are no short term catalysts for the stock price to increase further and in fact there will be some well justified doubts about the company's revenue projections. Would expect the stock to close mildly in the red at around $4.65.
company is basically fooling investors by harvesting some low hanging gross margin fruits while losing out with regards to the acquisition of new customers. Moreover nearly all of the projected revenue increase in 2014 looks to come from increasing product content in high end smartphones.
Clearly RFMD won't be able to go down this path much longer as it will become increasingly difficult to expand margins while growing revenues just slightly (which remains yet to be seen given that they are betting on the mostly saturated side of the smartphone market for this increase to happen). And it will be equally difficult to win even more dollar content with these existing customers as they already expanded these metrics sizeable in 2013.
The company needs to focus on new customer wins with emerging smartphone market leaders like LG, Huawei, Lenovo or ZTE or even Sony instead of squeezing the final dollars out of the existing customer base.
While ongoing margin progress and increasing penetration with major customers clearly deserve some kudos these achievements mask the fact that the customer concentration caused a massive revenue miss last quarter and will lead to another one for the current quarter with margin expansion not enough this time to save the eps number.
Even worse the company is placing another major bet on the high-end smartphone market mostly for the second half of the year which clearly points to the IPhone 6 release in autumn. Given the increasing saturation of the high-end segment as evidenced by very weak numbers from both Apple and Samsung one might doubt that new devices will appeal as much to customers as they did one or two years ago.
So management's guidance should be taken with a grain of salt here - if just one of the upcoming flagship smartphones from both Apple and Samsung will underperform expectations RFMD might very well end up the year with flat revenues which is simply unacceptable given that their end markets are still up
tempered FY revenue expectations
still no customer diversification in sight
clearly analyst estimates will have to be cut further going forward making the stock even more expensive than it is already.
which obviously will be the Samsung Galaxy S5 and the Apple IPhone 6 - given the increasing saturation in the high end smartphone market there's a great chance that at least the S5 will be a huge disappointment with revenues for the year coming in well below forecast - AGAIN.
nonsense - company is trying to compensate market share losses by improving the bottom line - while there's nothing wrong with 10% revenue growth and solid eps expansion the company is clearly lagging competitors. Going forward they won't be able to increase margins that easily so the slow business growth will weigh on the share price.
Obviously their new biggest customer is Apple which does not bode well for the future given the issues at the company.
I don't think they should be rewarded for temporarily trading in gross margins expansion for market share. Clearly they are losing market share to competitor Skyworks which in fact guided revenues above expectations for Q1. This will ultimately fire back at the company going forward. Would short the stock on the undeserved after hours move.
would happily short the stock here as there's no catalyst short and medium term
lol lol lol - they bought the company just because they had to to anything - at the time of the acquisition most analysts and investors were negative about the deal as Jumptap had been shopped around for some time already due to ongoing heavy losses and weakening growth which their venture investors didn't want to accept any longer.
yeah - but now it is above $5 - sequential growth rate came down qoq - would expect this to end in the red today
given the execution history I would be reluctant to declare victory just because MM had the pure luck to pick up Jumptap exactly at a time when all the marketing money is pouring into programmatic buying. Given that MM seems to quickly become the junior partner in the Jumptap merger it is clear the MM CEO couldn't stay any longer.
The market will have to absorb 5 million shares from PP short term so I don't think the stock will go up until the company will be able to give better than expected guidance for 2014 (which I still doubt).
quite optimistic especially given what happened last year
management should be put in jail for their ongoing lies
perhaps but the market has recovered nicely this afternoon and MM did absolutely nothing so I am not positive for the stock going into the close. Longer term investors should stay with the stock here though.
which looks to be a nice setup for a short trade into the close as disappointed momentum traders are going to exit positions. Tripling my short position for today and hoping for a close at day lows. But admittedly the stock could regain some momentum going into the close so my stop buy will be at day highs to cut losses.
I would agree here that he was forced to leave by the board amidst heavy institutional pressure to at least consider the possibility of a sale in the medium term. Short term the company obviously wants to build on its Q4 momentum by bringing in an outside high profile CEO and staying independent at least for now.
Would expect analysts to become more constructive on the company following the upcoming Q4 earnings call (of course guidance there needs to be at least in line with expectations) and look for some upgrades in the near future. While I am not positive on the stock in the very short run given today's muted reaction to the first earnings beat ever I would advice investors with a longer term approach to build positions here.