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Skyworks Solutions (SWKS) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Skyworks Solutions (SWKS) closed at $85.66 in the latest trading session, marking a -0.8% move from the prior day. This change lagged the S&P 500's 0.53% loss on the day. Meanwhile, the Dow lost 0.47%, and the Nasdaq, a tech-heavy index, lost 1%.

Prior to today's trading, shares of the chipmaker had gained 13.86% over the past month. This has outpaced the Computer and Technology sector's gain of 3.84% and the S&P 500's gain of 2.68% in that time.

SWKS will be looking to display strength as it nears its next earnings release, which is expected to be August 7, 2019. In that report, analysts expect SWKS to post earnings of $1.34 per share. This would mark a year-over-year decline of 18.29%. Our most recent consensus estimate is calling for quarterly revenue of $765.94 million, down 14.35% from the year-ago period.

SWKS's full-year Zacks Consensus Estimates are calling for earnings of $6.19 per share and revenue of $3.39 billion. These results would represent year-over-year changes of -14.27% and -12.36%, respectively.

Any recent changes to analyst estimates for SWKS should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. SWKS is currently a Zacks Rank #4 (Sell).

Investors should also note SWKS's current valuation metrics, including its Forward P/E ratio of 13.96. This represents a discount compared to its industry's average Forward P/E of 14.7.

It is also worth noting that SWKS currently has a PEG ratio of 1.48. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Semiconductors - Radio Frequency stocks are, on average, holding a PEG ratio of 1.71 based on yesterday's closing prices.

The Semiconductors - Radio Frequency industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 194, which puts it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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