Irvine, California-based Skyworks Solutions, Inc. (SWKS) develops, manufactures, and markets analog and mixed-signal semiconductor products and solutions. Valued at a market cap of $8.4 billion, the company’s products are used in aerospace, automotive, broadband, smartphone, defense, entertainment and gaming, industrial, and wearables applications.
This semiconductor company has significantly lagged behind the broader market over the past 52 weeks. Shares of SWKS have declined 34.4% over this time frame, while the broader S&P 500 Index ($SPX) has surged 15.4%. Moreover, on a YTD basis, the stock is down 11.8%, compared to SPX’s 1.1% return.
Narrowing the focus, SWKS has also notably underperformed the Invesco Semiconductors ETF (PSI), which soared 59.8% over the past 52 weeks and 19.1% on a YTD basis.
On Feb. 3, SWKS delivered better-than-expected Q1 results. The company’s net revenue declined 3.1% year-over-year to $1 billion, but topped analyst estimates of $998.6 million. Moreover, while its adjusted EPS of $1.54 decreased 3.8% from the year-ago quarter, it exceeded consensus expectations by a notable margin of 10%. Performance in its Mobile segment outpaced expectations, driven by solid execution, while Broad Markets continued to gain momentum, supported by accelerating growth in Wi-Fi 7 as well as data center and cloud infrastructure programs.
For the current fiscal year, ending in September, analysts expect SWKS’ EPS to decline 36.2% year over year to $2.93. The company’s earnings surprise history is mixed. It exceeded the consensus estimates in three of the last four quarters, while missing on another occasion.
Among the 25 analysts covering the stock, the consensus rating is a "Hold,” which is based on five “Strong Buy,” 19 “Hold,” and one "Moderate Sell.”
The configuration is less bearish than a month ago, with four analysts suggesting a "Strong Buy” rating.
On Feb. 2, Mizuho Financial Group, Inc. (MFG) analyst Vijay Rakesh maintained a “Hold” rating on SWKS and set a price target of $60, indicating a 7.3% potential upside from the current levels.
The mean price target of $78.79 represents a 40.9% premium from SWKS’ current price levels, while the Street-high price target of $140 suggests an ambitious 150.3% potential upside from the current levels.
On the date of publication, Neharika Jain 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.
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