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Skyworks Solutions (SWKS) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 mins read

In the latest trading session, Skyworks Solutions (SWKS) closed at $83.37, marking a +1.12% move from the previous day. This move lagged the S&P 500's daily gain of 2.28%. At the same time, the Dow added 2.24%, and the tech-heavy Nasdaq gained 1.72%.

Coming into today, shares of the chipmaker had lost 20.23% in the past month. In that same time, the Computer and Technology sector lost 12.66%, while the S&P 500 lost 16.08%.

SWKS will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.33, down 9.52% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $765.24 million, down 5.57% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.05 per share and revenue of $3.36 billion, which would represent changes of -1.94% and -0.43%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for SWKS. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 7% lower. SWKS is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that SWKS has a Forward P/E ratio of 13.62 right now. This valuation marks a premium compared to its industry's average Forward P/E of 12.27.

Also, we should mention that SWKS has a PEG ratio of 1.15. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. SWKS's industry had an average PEG ratio of 1.31 as of yesterday's close.

The Semiconductors - Radio Frequency industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 57, putting it in the top 23% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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Zacks Investment Research