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Skyworks Solutions

Nasdaq:SWKS
Snowflake Description

Flawless balance sheet with proven track record.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
SWKS
Nasdaq
$20B
Market Cap
  1. Semiconductors and Semiconductor Equipment
Company description

Skyworks Solutions, Inc., together with its subsidiaries, designs, develops, manufactures, and markets proprietary semiconductor products, including intellectual property worldwide. More info.


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3 Month History
SWKS
Industry
5yr Volatility vs Market

Value

 Is Skyworks Solutions undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Skyworks Solutions to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

How is this discounted cash flow calculated?

  • The current share price of Skyworks Solutions is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Skyworks Solutions's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Skyworks Solutions's earnings available for a low price, and how does this compare to other companies in the same industry?
  • Skyworks Solutions is good value based on earnings compared to the US Semiconductors and Semiconductor Equipment industry average.
  • Skyworks Solutions is good value based on earnings compared to the US market.
Price based on expected Growth
Does Skyworks Solutions's expected growth come at a high price?
  • Skyworks Solutions is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Skyworks Solutions's assets?
  • Skyworks Solutions is overvalued based on assets compared to the US Semiconductors and Semiconductor Equipment industry average.
X
Value checks
We assess Skyworks Solutions's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Semiconductors and Semiconductor Equipment industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Semiconductors and Semiconductor Equipment industry average (and greater than 0)? (1 check)
  5. Skyworks Solutions has a total score of 2/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.
    Note 2: PEG ratio is based on analysts EPS growth expectations in 1 year (15.06%).

    Full details on the Value part of the Simply Wall St company analysis model.
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Discounted cash flow (2 Stage Free Cash Flow to Equity)

The calculations below outline how an intrinsic value for Skyworks Solutions is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.

See our documentation to learn about this calculation.

5 year cash flow forecast

Present value of next 5 years cash flows:
$4,818

Terminal Value

Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)

Terminal Value = $1,605 × (1 + 2.47%) ÷ (10.07% – 2.47%)

Terminal value based on the Perpetuity Method where growth (g) = 2.47%:
$21,632

Present value of terminal value:
$13,386

Equity Value

Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
$18,205 = $4,818 + $13,386

Value = Total value / Shares Outstanding ($18,205 / 184)

Discount to Share Price

Value per share:
$99.08

Current discount (share price of $108.54): -9.55%



Estimate of Discount Rate

The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.

Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)

Discount rate = 10.07% = 2.47% + (1.01 * 7.53%)



Estimate of Bottom Up Beta

The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value ($19,943,154,361).

Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))

1.01 = 1.01 (1 + (1- 30%) (0%))

Levered Beta used in calculation = 1.01



Assumptions
  1. The risk free rate of 2.47% is from the 10 year government bond rate in USD.
  2. The bottom-up beta is estimated by analysing other companies in the same industry.
  3. The Equity Risk Premium is calculated by subtracting the risk free rate from the market return premium (7.53%) (source: Buffet).
  4. The dividend discount model is automatically used for companies in the following industries: Banks, Insurance, Real Estate Investment Trusts (REITs), Diversified Financial Services and Capital Markets.

Future Performance

 How is Skyworks Solutions expected to perform in the next 1 to 3 years based on estimates from 23 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
11.2%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Skyworks Solutions expected to grow at an attractive rate?
  • Skyworks Solutions's earnings growth is expected to exceed the low risk savings rate of 3.6%.
Growth vs Market Checks
  • Skyworks Solutions's earnings growth is expected to exceed the US market average.
  • Skyworks Solutions's revenue growth is expected to exceed the US market average.
Annual Growth Rates Comparison
Analysts growth expectations
Super high growth metrics
High Growth Checks
  • Skyworks Solutions's earnings are expected to grow by 11.2% yearly, however this is not considered high growth (20% yearly).
  • Skyworks Solutions's revenue is expected to grow by 9.1% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Skyworks Solutions is expected to perform strongly, Return on Equity (ROE) in 3 years is estimated to be above 20%.

Improvement & Relative to industry
  • Performance (ROE) is expected to be above the current US Semiconductors and Semiconductor Equipment industry average.
  • A decline in Skyworks Solutions's performance (ROE) is expected over the next 3 years.
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Future performance checks
We assess Skyworks Solutions's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the US market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the US market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Skyworks Solutions has a total score of 4/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Skyworks Solutions performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Skyworks Solutions's growth in the last year to its industry (Semiconductors and Semiconductor Equipment).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Skyworks Solutions's year on year earnings growth rate has been positive on average over the past 5 years.
  • Skyworks Solutions's 1 year earnings growth is less than its 5 year annual average (1.5% vs 29%)
  • Skyworks Solutions's earnings growth has not matched the US Semiconductors and Semiconductor Equipment industry average in the past year (1.5% vs 35.1%).
Earnings and Revenue History
Skyworks Solutions's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Strong return on shareholders funds (ROE > 20%) last year.
  • Skyworks Solutions performed above the US Semiconductors and Semiconductor Equipment industry average based on Return on Assets (ROA) last year.
  • Performance based on Return on Capital Employed (ROCE) has improved significantly over 3 years.
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Past performance checks
We assess Skyworks Solutions's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Semiconductors and Semiconductor Equipment industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Skyworks Solutions has a total score of 4/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Skyworks Solutions's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Skyworks Solutions's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Skyworks Solutions is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Skyworks Solutions's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Skyworks Solutions's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of stock/ inventory/ unsold assets.
  • Skyworks Solutions has no debt, it does not need to be covered by total short term assets.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
  • Skyworks Solutions has no debt.
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Financial health checks
We assess Skyworks Solutions's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by short term assets? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Skyworks Solutions has a total score of 6/6, see the detailed checks below.


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Skyworks Solutions's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
1.07%
Current annual income from Skyworks Solutions dividends. Estimated to be 1.21% next year.
If you bought $2,000 of Skyworks Solutions shares you are expected to receive $0 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Paying below low risk savings rate (2.25%).
  • Paying below markets top dividend payers (3.18%).
Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
  • Whilst dividend payments have been stable, Skyworks Solutions has been paying a dividend for less than 10 years.
  • Dividend payments have increased, but Skyworks Solutions only paid a dividend in the past 4 years.
Current Payout to shareholders
What portion of Skyworks Solutions's earnings are paid to the shareholders as a dividend.
  • Dividends paid are well covered by net profit (4.7x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be thoroughly covered by net profit (6.7x coverage).
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Income/ dividend checks
We assess Skyworks Solutions's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.5%) - if not then the rest of the checks are ignored.
  2. Current dividend yield, is there one at all, is it higher than the low risk savings rate, and is it above the top 25% of dividend payers? (2 checks)
  3. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  4. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  5. How sustainable is the dividend, can Skyworks Solutions afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  6. Skyworks Solutions has a total score of 2/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Skyworks Solutions's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Liam Griffin, image provided by Google.
Liam Griffin
COMPENSATION $6,728,703
AGE 50
TENURE AS CEO 1.5 years
CEO Bio

Mr. Liam K. Griffin has been the President of Skyworks Solutions, Inc. since May 8, 2014 and its Chief Executive Officer since May 11, 2016. Mr. Griffin serves as Senior Vice President of Sales and Marketing at Advanced Analogic Technologies, Inc. Mr. Griffin served as an Executive Vice President of Skyworks Solutions Inc. since May 2011 until May 08, 2014 and served as its Corporate General Manager since November 20, 2012 until May 08, 2014. He served as Senior Vice President of Sales and Marketing of Skyworks Solutions Inc since August 2001 until May 2011. and served as its General Manager of High Performance Analog from May 2011 to November 2012. He served as a Vice President, Sales and Marketing of Skyworks Solutions Inc. since August 2001. He served as a Senior Vice President of Sales and Marketing and Vice President - Sales and Marketing at Alpha Industries Inc. He served as Vice President of Worldwide Sales of Vectron International, a division of Dover Corp. from 1997 to 2001 and served as its the Vice President of North American sales from 1995 to 1997. His prior experience included positions in marketing and engineering with units of AT&T Corp. He served as Marketing Manager at&T Microelectronics, Inc. and product and Process Engineer at&T Network Systems. He has been an Independent Director at Vicor Corp., since October 1, 2009. Mr. Griffin holds an M.B.A. degree from Boston University and a B.S. degree in Mechanical Engineering from the University of Massachusetts.

CEO Compensation
  • Liam's compensation has been consistent with company performance over the past year.
  • Liam's compensation appears reasonable.
Management Team Tenure

Average tenure and age of the Skyworks Solutions management team in years:

1.6
Average Tenure
51.8
Average Age
  • The average tenure for the Skyworks Solutions management team is less than 2 years, this suggests a new team.
Management Team

Dave Aldrich

TITLE
Executive Chairman
COMPENSATION
$7M
AGE
60

Liam Griffin

TITLE
Chief Executive Officer
COMPENSATION
$7M
AGE
50
TENURE
1.5 yrs

Kris Sennesael

TITLE
Chief Financial Officer and Senior Vice President
COMPENSATION
$3M
AGE
48
TENURE
1.3 yrs

Peter Gammel

TITLE
Chief Technology Officer
COMPENSATION
$2M
AGE
56
TENURE
4.7 yrs

Bruce Freyman

TITLE
COMPENSATION
$2M
AGE
56
TENURE
0.8 yrs

Steve Machuga

TITLE
Vice President of Worldwide Operations
AGE
52
TENURE
0.8 yrs

Mitch Haws

TITLE
Vice President of Investor Relations
AGE
53
TENURE
1.3 yrs

Robert Terry

TITLE
Vice President
AGE
51
TENURE
1 yrs

Thomas Schiller

TITLE
Vice President of Strategy & Corporate Development
AGE
46

Carlos Bori

TITLE
Vice President of Sales & Marketing
AGE
46
TENURE
1.4 yrs
Board of Directors Tenure

Average tenure and age of the Skyworks Solutions board of directors in years:

9.5
Average Tenure
60.6
Average Age
  • The tenure for the Skyworks Solutions board of directors is about average.
Board of Directors

Dave Aldrich

TITLE
Executive Chairman
COMPENSATION
$7M
AGE
60
TENURE
3.5 yrs

Liam Griffin

TITLE
Chief Executive Officer
COMPENSATION
$7M
AGE
50
TENURE
1.5 yrs

Tim Furey

TITLE
Non-Employee Director
COMPENSATION
$273K
AGE
59
TENURE
19.8 yrs

Bala Iyer

TITLE
Non-Employee Director
COMPENSATION
$273K
AGE
60
TENURE
15.4 yrs

Rob Schriesheim

TITLE
Independent Non-Employee Director
COMPENSATION
$275K
AGE
56
TENURE
11.5 yrs

Dave McLachlan

TITLE
Lead Independent Director
COMPENSATION
$318K
AGE
78
TENURE
3.5 yrs

Kevin Beebe

TITLE
Non-Employee Director
COMPENSATION
$273K
AGE
58
TENURE
13.8 yrs

Dave McGlade

TITLE
Non-Employee Director
COMPENSATION
$266K
AGE
56
TENURE
12.8 yrs

Chris King

TITLE
Director
COMPENSATION
$267K
AGE
68
TENURE
3.8 yrs
Recent Insider Trading
  • Skyworks Solutions insiders have only sold shares in the past 3 months.
Who owns this company?
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Management checks
We assess Skyworks Solutions's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap and profit (greater than 0.5% of the company's profit + 0.03% of market cap)? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Skyworks Solutions has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

Company News

Company Info

Map
Description

Skyworks Solutions, Inc., together with its subsidiaries, designs, develops, manufactures, and markets proprietary semiconductor products, including intellectual property worldwide. Its product portfolio includes amplifiers, attenuators, circulators/isolators, DC/DC converters, demodulators, detectors, diodes, directional couplers, diversity receive modules, filters, front-end modules, hybrids, LED drivers, low noise amplifiers, mixers, modulators, optocouplers/optoisolators, phase shifters, phase locked loops, power dividers/combiners, receivers, switches, synthesizers, technical ceramics, voltage controlled oscillators/synthesizers, and voltage regulators. The company provides its products for automotive, broadband, cellular infrastructure, connected home, industrial, medical, military, smartphone, tablet, and wearable applications. Skyworks Solutions, Inc. sells its products through direct sales force, electronic component distributors, and independent sales representatives. The company was founded in 1962 and is headquartered in Woburn, Massachusetts.

Details
Name: Skyworks Solutions, Inc.
Ticker: SWKS
Exchange: NasdaqGS
Founded: 1962
Market Cap: $19,943,154,361
Shares outstanding: 183,740,136
Website: http://www.skyworksinc.com
Address: Skyworks Solutions, Inc.
20 Sylvan Road,
Woburn,
Massachusetts, 01801,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqGS SWKS Common Stock Nasdaq Global Select US USD 26. Jun 2002
DB AWM Common Stock Deutsche Boerse AG DE EUR 26. Jun 2002
WBAG SWKS Common Stock Wiener Boerse AG AT EUR 26. Jun 2002
Number of employees
Current staff
Staff numbers
8,400
Skyworks Solutions employees.
Industry
Industry: Semiconductors
Sector: Semiconductors and Semiconductor Equipment