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Skyworks Solutions Inc SWKS

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Morningstar’s Analysis

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Skyworks Reports a Blowout Quarter with Hearty 5G Gains; Raising FVE to $176, Shares Fairly Valued

Brian Colello, CPA Sector Director

Analyst Note

| Brian Colello, CPA |

Narrow-moat Skyworks Solutions reported monster fiscal first-quarter results, significantly surpassing its revenue and profitability estimates with 69% year over year growth, thanks to a strong Apple iPhone 12 upgrade cycle and, more important, greater 5G radio frequency content per iPhone. Further, Skyworks’ achieved outstanding growth in non-smartphone markets as more and more devices incorporate wireless connectivity via either cellular or WiFi signals. The company’s forecast for the March quarter (50% year-over-year growth) suggests that these content gains are here to stay, as management also dismissed concerns about demand pull-in or inventory stockpiling. We raise our fair value estimate to $176 from $140 based on revenue well ahead of our prior expectations. Shares rose as much as 15% after hours to the $184 range, but we think the move is justified and we view shares as fairly valued.

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Company Profile

Business Description

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.

Contact
5260 California Avenue
Irvine, CA, 92617
T +1 949 231-3000
Sector Technology
Industry Semiconductors
Most Recent Earnings Dec 31, 2020
Fiscal Year End Oct 2, 2021
Stock Type Cyclical
Employees 10,000

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