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

Zacks Equity Research
·3 min read

In the latest trading session, Skyworks Solutions (SWKS) closed at $158.49, marking a +1.4% move from the previous day. This change outpaced the S&P 500's 0.57% gain on the day. Meanwhile, the Dow gained 1.44%, and the Nasdaq, a tech-heavy index, lost 0.61%.

Prior to today's trading, shares of the chipmaker had gained 0.33% over the past month. This has lagged the Computer and Technology sector's gain of 1.94% and the S&P 500's gain of 0.83% in that time.

SWKS will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.07, up 23.21% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.06 billion, up 17.94% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.48 per share and revenue of $3.92 billion. These totals would mark changes of +22.02% and +16.68%, respectively, from last year.

Any recent changes to analyst estimates for SWKS should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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, 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. The Zacks Consensus EPS estimate remained stagnant within the past month. SWKS currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, SWKS is holding a Forward P/E ratio of 20.89. Its industry sports an average Forward P/E of 19.58, so we one might conclude that SWKS is trading at a premium comparatively.

It is also worth noting that SWKS currently has a PEG ratio of 1.57. 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. Semiconductors - Radio Frequency stocks are, on average, holding a PEG ratio of 1.41 based on yesterday's closing prices.

The Semiconductors - Radio Frequency industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 205, putting it in the bottom 20% 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