smartphone chip manufacturer corvo (QRVO -27.08%) It fell 25.5% through 10:55 a.m. ET on Wednesday, despite beating consensus estimates for sales and earnings last night.

Going into its fiscal 2025 earnings report, analysts estimate Qorvo will earn $1.85 per share (pro forma) on sales of $1.03 billion. Instead, Qorvo reported profits of $1.88 per share and sales of $1.05 billion; which ranked both top and bottom.

Qorvo stock by the numbers

But here’s the thing: Despite “forecasts being good,” Qorvo’s Q2 numbers were objectively terrible.

Sales fell 5 percent year-on-year in the second quarter semiconductor stockAnd gross profit margin Qorvo’s earnings from these sales dropped to 42.6%. At the same time, operating costs increased by 29%.

Result: While Qorvo reported $1.88 corrected profit, net income for the quarter loss Profit was $0.18 per share compared to earnings of $0.99 per share a year ago.

And now the real bad news: Things are getting worse. Qorvo “exceeded the midpoint of guidance on revenue, gross margin and EPS” in the second quarter, according to CFO Grant Brown. But looking ahead to the third quarter, the company sees a “negative mix” for “entry-level” phones going forward, although chip sales for “flagship and premium” smartphones are “holding up well.”

Although Qorvo has been cutting costs and consolidating production ahead of time, investors expect a third-quarter sales loss ($900 million versus Wall Street’s forecast of more than $1 billion) as well as a miss in earnings of about $1.20 per share. They can wait. corrected The earnings came in short of the Street’s forecast of $1.92 per share.

Are Qorvo shares on sale?

Qorvo estimates only non-GAAP It’s hard to tell with numbers how bad this will actually be. However, Wall Street is bracing for a net loss of $0.50 per share for the full fiscal year. On the plus side, free cash flow remains positive. On the minus side, Qorvo price-free cash flow ratio 25 still doesn’t look attractive.

While today’s sell-off looks like a good buying opportunity, I think there is still downside risk in Qorvo shares.