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Skyworks Solutions (SWKS)
NASDAQ:SWKS
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Skyworks Solutions
(NASDAQ:SWKS)63Neutral
Positive Factors
Business Strategy
The Board of Directors authorized a new repurchase agreement up to approximately $2 billion.
Financial Performance
Despite challenges, Skyworks posted solid December quarter results and an encouraging outlook for its March period, with revenue and EPS slightly ahead of expectations.
Negative Factors
Market Share Loss
Skyworks loses key iPhone 17 socket, with some small wins to mitigate some of the downside.
Operational Challenges
Management noted factory underutilization from the Apple content loss would be a headwind to gross margins.
Revenue Impact
The company is expecting a considerable decline in Apple-related revenue over the next couple of years, impacting its financial performance negatively.
Skyworks Solutions (SWKS) vs. S&P 500 (SPY)
Market Cap
$10.83B
Dividend Yield4.13%
Average Volume (3M)3.93M
Price to Earnings (P/E)20.6
Beta (1Y)1.37
Revenue Growth-12.91%
EPS Growth-42.12%
CountryUS
Employees10,100
SectorTechnology
Sector Strength48
IndustrySemiconductors and Equipment
Share Statistics
EPS (TTM)3.26
Shares Outstanding160,741,030
10 Day Avg. Volume3,590,361
30 Day Avg. Volume3,934,631
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.68
Price to Cash Flow (P/CF)7.20
P/FCF Ratio7.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$70.31Price Target Upside-3.17% Downside
Rating ConsensusHold
Number of Analyst Covering21
Skyworks Solutions Business Overview & Revenue Model
Company DescriptionSkyworks Solutions, Inc. is a prominent American semiconductor company specializing in the design and manufacturing of innovative analog and mixed-signal semiconductors. With a focus on enabling connectivity, Skyworks serves a wide range of markets including smartphones, tablets, wireless infrastructure, automotive, aerospace, and IoT (Internet of Things). The company's products include amplifiers, attenuators, circulators, detectors, diodes, and switches, which are integral to facilitating wireless communication in various applications.
How the Company Makes MoneySkyworks Solutions generates revenue primarily through the sale of its semiconductor products to original equipment manufacturers (OEMs) and other technology companies. The company's key revenue streams include product sales in the mobile communications sector, where its components are used in smartphones and other mobile devices, and the broad markets sector, which encompasses automotive, aerospace, and IoT applications. Skyworks maintains significant partnerships with leading technology firms, leveraging these relationships to expand its market reach and drive sales. Additionally, the company's focus on innovation and the development of cutting-edge solutions in wireless technology contribute to its earnings by enabling it to meet the evolving demands of the industry.
Skyworks Solutions Financial Statement Overview
Summary
Skyworks Solutions demonstrates a solid financial foundation with strong profitability margins and low leverage. While the income statement highlights a challenge in revenue growth, the balance sheet and cash flow statements provide comfort with stability and strong cash generation. The company is well-positioned financially, but addressing revenue growth will be key to enhancing future performance.Income Statement
Skyworks Solutions' income statement shows a declining revenue trend with the latest TTM revenue at $4.045 billion, down from $4.778 billion in the previous annual period. Despite this, the company maintains a strong gross profit margin of approximately 40.94% and a net profit margin of 13% for the TTM. The EBIT margin stands at 13.88% and EBITDA margin at 22.86%, indicating operational efficiency. However, the recent decline in revenue and profits poses a concern for growth stability.75
Positive
Balance Sheet
The balance sheet reflects a solid equity position with a stockholders' equity of $6.401 billion, resulting in a strong equity ratio of 76.82% in the latest TTM period. The debt-to-equity ratio is conservative at 0.18, suggesting low leverage risk. Return on equity (ROE) is 8.23%, indicating moderate but stable profitability. Overall, the balance sheet is robust, providing financial stability and low leverage risk.80
Positive
Cash Flow
Skyworks Solutions shows a strong operating cash flow of $1.427 billion in the TTM, with a healthy free cash flow of $1.235 billion. However, the free cash flow has decreased compared to $1.667 billion in the prior annual period, indicating a negative growth trend. The operating cash flow to net income ratio is high at 2.71, showing efficient cash generation relative to net income. Despite the decrease in free cash flow, the company maintains a strong cash flow position.70
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 4.04B | 4.18B | 4.77B | 5.49B | 5.11B | 3.36B | Gross Profit |
| 1.66B | 1.72B | 2.11B | 2.60B | 2.51B | 1.61B | EBIT |
| 561.40M | 637.40M | 1.13B | 1.53B | 1.61B | 891.80M | EBITDA |
| 924.90M | 1.12B | 1.76B | 2.21B | 2.05B | 1.26B | Net Income Common Stockholders |
| 526.70M | 596.00M | 982.80M | 1.28B | 1.50B | 814.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.02B | 1.56B | 734.40M | 586.80M | 1.03B | 980.00M | Total Assets |
| 8.62B | 8.28B | 8.43B | 8.91B | 8.59B | 5.11B | Total Debt |
| 2.19B | 1.20B | 1.51B | 2.71B | 2.24B | 150.70M | Net Debt |
| 1.31B | -168.20M | 790.50M | 2.14B | 1.35B | -829.30M | Total Liabilities |
| 3.28B | 1.95B | 2.34B | 3.44B | 3.29B | 942.50M | Stockholders Equity |
| 5.33B | 6.34B | 6.08B | 5.47B | 5.30B | 4.16B |
| Cash Flow | Free Cash Flow | ||||
| 1.23B | 1.67B | 1.62B | 914.90M | 1.12B | 806.00M | Operating Cash Flow |
| 1.43B | 1.82B | 1.86B | 1.42B | 1.77B | 1.20B | Investing Cash Flow |
| -324.90M | -355.90M | -224.40M | -378.90M | -3.13B | -581.40M | Financing Cash Flow |
| -529.30M | -819.00M | -1.48B | -1.36B | 1.68B | -907.70M |
Skyworks Solutions Technical Analysis
Negative
72.61
Price Trends
79.59
Negative
84.11
Negative
92.43
Negative
Market Momentum
-3.15
Negative
53.14
Neutral
82.69
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SWKS, the sentiment is Negative. The current price of 72.61 is above the 20-day moving average (MA) of 66.24, below the 50-day MA of 79.59, and below the 200-day MA of 92.43, indicating a neutral trend. The MACD of -3.15 indicates Negative momentum. The RSI at 53.14 is Neutral, neither overbought nor oversold. The STOCH value of 82.69 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SWKS.
Skyworks Solutions Risk Analysis
Skyworks Solutions disclosed 32 risk factors in its most recent earnings report. Skyworks Solutions reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Skyworks Solutions Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $175.29B | 16.94 | 41.96% | 2.15% | 12.13% | 36.17% | |
74 Outperform | $110.49B | 71.04 | 4.43% | 1.65% | -19.28% | -44.00% | |
74 Outperform | $900.80B | 155.28 | 14.85% | 1.21% | 43.99% | -62.55% | |
71 Outperform | $172.28B | 36.44 | 28.25% | 2.81% | -10.72% | -26.60% | |
69 Neutral | $54.98B | 22.04 | 28.16% | 1.87% | -4.99% | -9.18% | |
63 Neutral | $10.83B | 20.65 | 8.34% | 4.13% | -12.91% | -42.12% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
SWKS
Skyworks Solutions
72.61
-30.34
-29.47%
ADI
Analog Devices
225.86
33.12
17.18%
AVGO
Broadcom
194.96
65.83
50.98%
NXPI
NXP Semiconductors
222.56
-25.26
-10.19%
QCOM
Qualcomm
161.22
-6.00
-3.59%
TXN
Texas Instruments
190.52
22.91
13.67%
Skyworks Solutions Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -15.74% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed sentiment. While Skyworks demonstrated strong financial performance and growth in the mobile and broad markets segments, concerns over a significant content loss with its largest customer and ongoing challenges in industrial and infrastructure dampen the outlook.Highlights
Strong Financial Performance
Skyworks reported revenue of $1.068 billion, earnings per share of $1.60, and generated free cash flow of $338 million, exceeding the mid-point of guidance.
Mobile Segment Growth
Mobile revenue grew 6% sequentially, driven by multiple product launches across top mobile customers.
Broad Markets Momentum
Broad Markets experienced modest growth for four consecutive quarters, with expectations for continued growth as demand signals and backlog improve.
Automotive Segment Recovery
Automotive returned to year-over-year growth due to design wins in connected car, onboard charging, and infotainment.
New CEO Announcement
Philip Brace was announced as the new President and CEO, bringing extensive experience from Sierra Wireless, Blackberry, Lantronix, and Inseego.
Lowlights
Content Loss at Largest Customer
Skyworks' content position with its largest customer is expected to decline 20% to 25% in the upcoming phone cycle due to a transition from single source to dual source.
Industrial and Infrastructure Challenges
Persistent inventory challenges continue to impact the industrial and infrastructure segments, contributing to subdued demand.
Projected Mobile Revenue Decline
Mobile business is expected to decline mid-to-high teens sequentially in the next quarter due to historical seasonality.
Company Guidance
During Skyworks Solutions' fiscal Q1 2025 earnings call, the company provided guidance for the second quarter, projecting revenue between $935 million and $965 million. This reflects a sequential decline in their mobile business, anticipated to decrease by mid-to-high teens, consistent with historical seasonality. However, Skyworks expects additional sequential growth in the Broad Markets segment, despite ongoing inventory challenges in industrial and infrastructure sectors. The gross margin is forecasted between 45.5% and 46.0%, slightly adjusted for lower sales volumes. Operating expenses are expected to range from $220 million to $228 million, driven by increased R&D project expenses and social charge adjustments at the start of the calendar year. Other income is projected at $6 million, with an effective tax rate of 12% to 12.5%, leading to an anticipated diluted earnings per share of $1.20 at the midpoint of the revenue range. The company also announced a new $2 billion stock repurchase program as part of its capital allocation strategy.Skyworks Solutions Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Skyworks Solutions Appoints Philip Brace as CEO
Positive
Feb 6, 2025
On February 4, 2025, Skyworks Solutions, Inc. announced the appointment of Philip G. Brace as the new Chief Executive Officer and President, effective February 17, 2025, succeeding Liam K. Griffin, who will step down on the same date. Concurrently, Christine King, previously Lead Independent Director, was appointed Chairman of the Board. The leadership transition was part of a comprehensive succession process with Brace bringing extensive experience from the semiconductor, server, IoT, and storage industries. His appointment is expected to drive Skyworks’ long-term initiatives and enhance its market presence, particularly in the wireless networking revolution. The announcement also included details of Brace’s compensation package, performance-based incentives, and severance agreements designed to align his interests with the company’s performance goals.
Executive/Board ChangesBusiness Operations and Strategy
Skyworks Solutions Approves 2025 Executive Incentive Plan
Neutral
Dec 13, 2024
Skyworks Solutions has approved its Fiscal Year 2025 Executive Incentive Plan, which sets cash incentive awards for senior management based on achieving specific corporate performance metrics. This plan aims to align executive compensation with company performance, potentially doubling target awards if metrics are surpassed, and may impact the company’s strategic focus and stakeholder interests.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.