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Skyworks Solutions (SWKS) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Skyworks Solutions (SWKS) closed at $69.54, marking a +1.58% move from the previous day. This change outpaced the S&P 500's 0.16% gain on the day. Elsewhere, the Dow gained 0.26%, while the tech-heavy Nasdaq added 0.29%.

Coming into today, shares of the chipmaker had lost 22.67% in the past month. In that same time, the Computer and Technology sector lost 7.21%, while the S&P 500 lost 3.66%.

Wall Street will be looking for positivity from SWKS as it approaches its next earnings report date. In that report, analysts expect SWKS to post earnings of $1.50 per share. This would mark a year-over-year decline of 8.54%. Meanwhile, our latest consensus estimate is calling for revenue of $825.46 million, down 7.7% from the prior-year quarter.

SWKS's full-year Zacks Consensus Estimates are calling for earnings of $6.62 per share and revenue of $3.57 billion. These results would represent year-over-year changes of -8.31% and -7.82%, respectively.

Investors should also note any recent changes to analyst estimates for SWKS. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 1.74% higher. SWKS is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, SWKS is holding a Forward P/E ratio of 10.34. For comparison, its industry has an average Forward P/E of 10.99, which means SWKS is trading at a discount to the group.

We can also see that SWKS currently has a PEG ratio of 0.91. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Semiconductors - Radio Frequency industry currently had an average PEG ratio of 0.97 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 248, putting it in the bottom 4% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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