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

Zacks Equity Research

Skyworks Solutions (SWKS) closed the most recent trading day at $75.53, moving -0.25% from the previous trading session. This change lagged the S&P 500's 0.3% gain on the day. Elsewhere, the Dow gained 0.15%, while the tech-heavy Nasdaq added 0.42%.

Prior to today's trading, shares of the chipmaker had gained 8.57% over the past month. This has outpaced the Computer and Technology sector's gain of 0.55% and the S&P 500's gain of 2.2% in that time.

Investors will be hoping for strength from SWKS as it approaches its next earnings release. On that day, SWKS is projected to report earnings of $1.34 per share, which would represent a year-over-year decline of 18.29%. Our most recent consensus estimate is calling for quarterly revenue of $765.94 million, down 14.35% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.19 per share and revenue of $3.39 billion, which would represent changes of -14.27% and -12.3%, respectively, from the prior 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. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 7% lower within the past month. SWKS is currently sporting a Zacks Rank of #4 (Sell).

Digging into valuation, SWKS currently has a Forward P/E ratio of 12.23. Its industry sports an average Forward P/E of 12.61, so we one might conclude that SWKS is trading at a discount comparatively.

Also, we should mention that SWKS has a PEG ratio of 1.21. 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 was holding an average PEG ratio of 1.18 at yesterday's closing price.

The Semiconductors - Radio Frequency industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 245, which puts it in the bottom 5% 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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