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With a market cap of $14.5 billion, Irvine, California-based Skyworks Solutions, Inc. (SWKS) is a leading designer and manufacturer of high-performance analog and mixed-signal semiconductors that power wireless connectivity. The company's extensive product portfolio includes amplifiers, front-end modules, RF sub-systems, and linear integrated circuits (ICs) catering to markets such as automotive, medical, industrial, and consumer electronics.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Skyworks Solutions fits this criterion perfectly. With a global presence spanning the United States, China, South Korea, Taiwan, Europe, and other regions, Skyworks serves diverse industries, including aerospace, broadband, defense, and connected devices. Leveraging its proprietary technologies, the company enables innovative solutions for smartphones, wearables, gaming systems, and advanced infrastructure applications.
Despite a 25.8% decline from its 52-week high of $120.86 reached in July, shares of this chipmaker have declined 9.3% over the past three months, underperforming the broader S&P 500 Index’s ($SPX) 3.5% return over the same time frame.
In the longer term, SWKS stock is down 15.1% over the past six months, lagging behind SPX’s 8.3% gain. Moreover, shares of SWKS have dipped 21.6% over the past 52 weeks, compared to the 24.2% return of the SPX over the same time frame.
SWKS has been trading below its 50-day moving average since August and also stayed below its 200-day moving average since September.
Shares of Skyworks Solutions fell 4.4% following its Q4 earnings release due to persistent challenges overshadowing earnings beat and revenue match. Despite surpassing adjusted EPS expectations with $1.55 and matching estimated revenue of $1 billion, the year-over-year declines of 29.5% and 15.9%, respectively, highlighted ongoing weaknesses. High inventory levels, uneven demand in automotive and industrial markets, and muted global demand added to investor concerns about near-term growth. Additionally, contracting margins, including a 70 bps drop in gross margin and a 600 bps decline in operating margin, signaled profitability pressures.
Nevertheless, SWKS has experienced a less pronounced decline than its rival, Qorvo, Inc. (QRVO), which has dropped 37.8% over the past 52 weeks and a 36.5% dip over the past six months.
Due to SWKS’ underperformance, analysts remain cautious about its prospects. The stock has a consensus rating of “Hold” from the 25 analysts covering it, and as of writing, SWKS is trading below the mean price target of $95.11.
