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

Zacks Equity Research
·3 mins read

Skyworks Solutions (SWKS) closed at $145.50 in the latest trading session, marking a +0.8% move from the prior day. This change lagged the S&P 500's 0.83% gain on the day. At the same time, the Dow added 1.2%, and the tech-heavy Nasdaq gained 0.74%.

Heading into today, shares of the chipmaker had lost 1.44% over the past month, outpacing the Computer and Technology sector's loss of 5.53% and the S&P 500's loss of 4.83% in that time.

SWKS will be looking to display strength as it nears its next earnings release. In that report, analysts expect SWKS to post earnings of $1.52 per share. This would mark no growth from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $840.22 million, up 1.55% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.80 per share and revenue of $3.24 billion, which would represent changes of -6% and -4.06%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for SWKS. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 has moved 0.12% higher. SWKS is currently a Zacks Rank #3 (Hold).

Digging into valuation, SWKS currently has a Forward P/E ratio of 24.91. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 24.91.

Also, we should mention that SWKS has a PEG ratio of 1.97. 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. The Semiconductors - Radio Frequency industry currently had an average PEG ratio of 1.74 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 207, putting it in the bottom 19% 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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