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Stockchase InsightsSkyworks Solutions Inc.SWKSBUYMar 15, 2023

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.

SWKS got a big push with the potential of 5G technology.
It is down 8% in a year and up 24% in 2023. Relatively speaking, this is not so bad for a tech company.
The balance sheet is strong and it is priced well at 12X earnings.
Growth (EPS) should be in the 15% plus range over the next two years.
The last quarter matched estimates but of course in this market investors are always looking for 'more'.
The main issue here has been the decline in smartphone sales.
There was a glut of inventory, and as this gets worked down we would expect better things from SKWS.
That being said, a recession is not going to help sales.
We think it is OK and worth holding.
The combination of valuation, balance sheet and potential we think is decent.
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$111.70

Stock price when the opinion was issued

$72.56

As of Jun 18, 2026. Market Open.

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SELL

The sector is up 50% to date, but the revenue outlook is muddy due to the macro economy. So, he expects weaker demand for smartphones.

COMMENT

After earnings, is up only 1.5% on a strong rally day. Honestly, he's disappointed by this move.

BUY

Trades at 11x earnings, $1.6 billion free cash flow, 12% free cash flow yield and no debt! But guidance was weak. Bottoming of demand is not here, but further ahead. Is up modestly today.

BUY

Just bought Skyworks and Alibaba. China is a great contrary play, and BABA is cheap. Skyworks is in every smart phone in the world, and they've been re-rated 50%. They boast attractive demographics and valuation.

BUY ON WEAKNESS

Has huge exposure to smartphones and the internet of things. When it reported a few weeks ago, the quarter was solid, though guidance light due to lightness in smartphones. Has pulled back to now trades at a cheap 12x PE estimates. Pays a 2.4% yield. Shares are up 12% for the year.

BUY

Just bought it. Trades at 12x PE with an 11% free cash flow yield. They make cell phone chips (i.e iPhones), but only 2% exposure to China. SWKS has strong inventory management, so she bought it. Growth lies in growing demand for ever-more complex chips.

BUY

Allan Tong’s Discover Picks SWKS stock pays a 2.63% dividend yield based on a low 28.18% payout ratio in a space that seldom pays anything. In fact, the company raised its divvy by 11% in August, which means eight straight years of dividend growth or an 463.6% increase since it started paying a dividend. Read Mixed bag of 3 Defensive Stocks for our full analysis.

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK

(A Top Pick Jul 14/22, Down 7.3%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with SWKS has triggered its stop at $90. To remain disciplined, we recommend covering the position at this time.

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Unlock this Panic-proof Portfolio opinion with Stockchase Premium

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK

(A Top Pick Jul 14/22, Down 1.6%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with SWKS is progressing well. We now recommend to trail up the stop from $80 to $90.

BUY

Years of heavy investing and a smart acquisition, their EPS has soared. Numbers still look good. Yet, shares are down over 35% this year. It trades at 9x earnings. These stocks are out of fashion. SWKS is seen as only an Apple supplier, but they diversified a lot. Their last quarter was solid.

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Unlock this Panic-proof Portfolio opinion with Stockchase Premium

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK

Stockchase Research Editor: Michael O'Reilly The semiconductor chip space has been under pressure this year due to supply chain issues and global economic concerns. However, as the market readjusts, the demand for chips will soon resume. SWKS provides wireless chips for mobile, automotive, home and industrial uses. It is a major supplier to Apple, but has been working to diversify into Android and wearable technology. It pays a good dividend, backed by a payout ratio under 30% of cash flow. Its recently reported earnings support a ROE of 30%. We recommend a stop loss at $80, looking to achieve $167 -- upside over 73%. Yield 2.3% (Analysts’ price target is $166.95)

BUY

It's grossly undervalued. They have a lot of exposure to Apple. With hot inflation, he fears that consumers will spend more on groceries and gas, and less on $1,000 phones. But Skyworks is selling at private equity multiples, which makes it attractive.

BUY

It's part of the lesser-developed chips that go into Apple products. The shares are too low compared to their peers. Run by a good CEO.

BUY

He added to his holding. 50% of their business is with Apple while other businesses are growing nicely. They reported a good quarter and is selling at 10x earnings.

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