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Valued at a market cap of $16.4 billion, Skyworks Solutions, Inc. (SWKS) designs, manufactures, and sells proprietary semiconductor products. The California-based company has primarily designed its product portfolio around two markets: cellular handsets and analog semiconductors.
The shares of this chipmaker company have underperformed the broader market over the past 52 weeks. SWKS has declined 4.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 19.6%. In 2024, shares of SWKS are down 9.2%, compared to SPX’s 12% gain on a YTD basis.
Zooming in further, SWKS’ underperformance looks even more pronounced compared to the Nasdaq Semiconductor ETF’s (FTXL) 21.8% gain over the past 52 weeks.
Skyworks Solutions has underperformed due to weak demand in the smartphone market, particularly affecting its sales from key customer Apple. The company's weak guidance and declining revenue from its mobile business, along with ongoing inventory corrections, have further weighed on the stock's performance. Moreover, the stock dropped 3.5% following its Q3 earnings release on Jul. 30 due to a significant decline in revenue, primarily driven by sluggish demand for automotive chips. Additionally, net income per share decreased to $0.75 from $1.22 in the same period last year, raising concerns about the company's profitability.
For the current fiscal year, ending in September, analysts expect SWKS’ EPS to decline 31.5% year over year to $5.21. The company's earnings surprise history is promising. It beat the consensus estimates in each of the last four quarters.
Among the 26 analysts covering the stock, the consensus rating is a “Hold.” That’s based on six “Strong Buy” ratings, 18 “Holds,” one “Moderate Sell,” and one “Strong Sell.”
This configuration is slightly more bullish than three months before, with five analysts suggesting a "Strong Buy."
On Jul. 30, Barclays analyst Thomas O’Malley maintained a “Hold” rating on Skyworks Solutions and raised the price target to $115.
The mean price target of $115.53 represents a premium of 13.2% to SWKS' current levels. The Street-high price target of $140 implies a notable potential upside of 37.2% from the current price level.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
