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

Zacks Equity Research

Skyworks Solutions (SWKS) closed at $91.66 in the latest trading session, marking a +1.78% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.56%. Elsewhere, the Dow gained 0.49%, while the tech-heavy Nasdaq added 1.01%.

Prior to today's trading, shares of the chipmaker had gained 12.07% over the past month. This has outpaced the Computer and Technology sector's gain of 1.92% and the S&P 500's gain of 1.38% in that time.

SWKS will be looking to display strength as it nears its next earnings release, which is expected to be November 12, 2019. The company is expected to report EPS of $1.50, down 22.68% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $825.39 million, down 18.15% from the year-ago period.

Investors might also notice recent changes to analyst estimates for SWKS. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. The Zacks Consensus EPS estimate has moved 0.46% higher within the past month. SWKS is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, SWKS is holding a Forward P/E ratio of 14.57. For comparison, its industry has an average Forward P/E of 15.04, which means SWKS is trading at a discount to the group.

It is also worth noting that SWKS currently has a PEG ratio of 1.78. 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 1.71 as of yesterday's close.

The Semiconductors - Radio Frequency industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 46, which puts it in the top 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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