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Skyworks Solutions Inc SWKS

Morningstar Rating
$93.62 −0.47 (0.50%)
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Company Report

Skyworks Earnings: Cutting Our Valuation to $115 From $133 as Firm Expects to Lose Content at Apple

Narrow-moat Skyworks Solutions reported decent fiscal second-quarter results. Still, it provided investors with a disappointing outlook for the June quarter and, more importantly, hinted at 10% lower dollar content in the next wave of Apple iPhones coming to market in late 2024, which should weigh on fiscal 2025 revenue. We don’t believe the lost content is associated with an in-house Apple product, nor is it the start of a death spiral for the company’s relationship with Apple. Still, it provides yet another headwind to future radio frequency revenue growth. We cut our fair value estimate to $115 from $133. Shares sold off as much as 9% after hours to $96, so still have a modest margin of safety for investors today.

Price vs Fair Value

SWKS is trading at a 837% premium.
Price
$93.62
Fair Value
$391.00
Uncertainty
High
1-Star Price
$891.17
5-Star Price
$89.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Skyworks should continue to see higher dollar content per phone as customers in developed and emerging markets shift away from basic handsets toward more complex 4G and 5G smartphones.

Bears

Pricing on 4G and 5G RF components has been robust in recent years, but large customers like Apple and Samsung wield significant pricing power and could exert pricing pressure on vendors like Skyworks over time.

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Trading Information

Previous Close Price
$94.09
Day Range
$92.8194.80
52-Week Range
$85.06115.69
Bid/Ask
$93.65 / $93.75
Market Cap
$15.02 Bil
Volume/Avg
1.6 Mil / 2.5 Mil

Key Statistics

Price/Earnings (Normalized)
12.57
Price/Sales
3.32
Dividend Yield (Trailing)
2.83%
Dividend Yield (Forward)
2.89%
Total Yield
3.09%

Company Profile

Skyworks Solutions produces semiconductors for wireless handsets and other devices that are used to enable wireless connectivity. Its main products include power amplifiers, filters, switches, and integrated front-end modules that support wireless transmissions. Skyworks' customers are mostly large smartphone manufacturers, but the firm also has a growing presence in nonhandset applications such as wireless routers, medical devices, and automobiles.
Sector
Technology
Industry
Semiconductors
Stock Style Box
Mid Value
Total Number of Employees
9,750

Competitors

Valuation

Metric
SWKS
AVGO
QCOM
Price/Earnings (Normalized)
12.5732.9121.19
Price/Book Value
2.369.418.86
Price/Sales
3.3215.866.00
Price/Cash Flow
9.8730.5021.33
Price/Earnings
SWKS
AVGO
QCOM

Financial Strength

Metric
SWKS
AVGO
QCOM
Quick Ratio
3.020.831.85
Current Ratio
5.191.332.65
Interest Coverage
20.986.6312.69
Quick Ratio
SWKS
AVGO
QCOM

Profitability

Metric
SWKS
AVGO
QCOM
Return on Assets (Normalized)
14.16%20.50%20.97%
Return on Equity (Normalized)
19.76%59.22%48.60%
Return on Invested Capital (Normalized)
16.25%26.13%28.90%
Return on Assets
SWKS
AVGO
QCOM
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MU
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