Skyworks Solutions, Inc. (NASDAQ:SWKS): What Does The Future Look Like?
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Skyworks Solutions, Inc.’s (NASDAQ:SWKS) latest earnings announcement in September 2018 indicated that the company faced a minor headwind with earnings falling from US$1.0b to US$918m, a change of -9.1%. Below is my commentary, albeit very simple and high-level, on how market analysts view Skyworks Solutions’s earnings growth outlook over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Skyworks Solutions
Market analysts’ prospects for the coming year seems optimistic, with earnings climbing by a robust 16%. This growth seems to continue into the following year with rates arriving at double digit 28% compared to today’s earnings and reduces to US$1.0b by 2022.
Although it is informative knowing the growth each year relative to today’s value, it may be more valuable to analyze the rate at which the business is moving every year, on average. The pro of this approach is that we can get a bigger picture of the direction of Skyworks Solutions’s earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To compute this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 10%. This means, we can expect Skyworks Solutions will grow its earnings by 10% every year for the next few years.
Next Steps:
For Skyworks Solutions, I’ve put together three important aspects you should further examine:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is SWKS worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SWKS is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SWKS? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
