Shares of technology company, RF Micro Devices (RFMD), hit a new 52-week high of $17.05 on Dec 30, eventually closing at $16.94. The company delivered one-year as well as year-to-date return of more than 228%. Average volume of shares traded over the last three months was nearly 11,560K.
Why the Uptrend?
RF Micro Devices manufactures radio frequency (RF) chips used in smartphones and several other products. These RF chipsets support several frequency bands, from the earlier 2G networks to the latest 4G LTE.
RF Micro stands to benefit from the growing adoption of 4G LTE and the continued strength in the RF content market. The upcoming global wave of mobile phone upgrades to 4G will increase the demand for RF content, therefore providing RF Micro ample opportunities to boost top line.
Moreover, RF Micro’s merger with TriQuint Semiconductor (TQNT), expected to close on Dec 31, will create a new entity named Qorvo Inc. The combined entity is likely to be a behemoth in the semiconductor manufacturing industry, offering vital components to premier mobile companies like Apple Inc. (AAPL), BlackBerry Limited (BBRY) and Samsung Electronics Co. Ltd. This new entity will bring all the critical RF components essential for making mobile devices under the same banner, thereby creating an undisputed market leader boasting a diversified product portfolio.
Additionally, the company gained solid momentum from its strong fundamentals and better-than-expected second-quarter fiscal 2015 results released on Oct 29. Since then, the stock soared 40.6%.
RF Micro’s top line increased 14.4% year over year to $362.0 million. The company benefitted from the increasing global demand for mobile data. Also, non-GAAP earnings came in at 27 cents per share, which surpassed the Zacks Consensus Estimate of 25 cents.
Moreover, the Zacks Consensus Estimate reflects 14.5% year-over-year growth in revenues for fiscal 2015. Additionally, it has delivered an average earnings surprise of nearly 25.2% over the trailing four quarters. RF Micro’s strong revenue growth, solid financial conditions, new mobile data supportive technologies and strong long-term growth potential position it favorably.
RF Micro currently has a Zacks Rank #3 (Hold).
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