Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Skyworks Solutions's share price is below the future cash flow value, but not at a moderate discount (< 20%).
Skyworks Solutions's share price is below the future cash flow value, but not at a substantial discount (< 40%).
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
is considered below, and whether this is a fair price.
Price based on past earnings
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 Semiconductor industry average.
Skyworks Solutions is overvalued based on earnings compared to the US market.
Price based on expected Growth
Skyworks Solutions's expected growth come at a high price?
Skyworks Solutions is good value based on expected growth next year.
Price based on value of assets
What value do investors place on
Skyworks Solutions is overvalued based on assets compared to the US Semiconductor industry average.
Discounted cash flow (2 Stage Free Cash Flow to Equity)
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value. We use
analyst's estimates of cash flows going forward 5 years.
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 ($18,998,278,998).
The risk free rate of
2.47% is from the 10 year government bond rate in
The bottom-up beta is estimated by analysing other companies in the same
The Equity Risk Premium is calculated by subtracting the risk free rate from
the market return premium (7.53%) (source: Buffet).
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.
The future performance of a company is measured in the same way as past
performance, by looking at estimated
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
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Skyworks Solutions's earnings growth is expected to exceed the low risk savings rate of 4.5%.
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
High Growth Checks
Skyworks Solutions's earnings are expected to grow significantly at over 20% yearly.
Skyworks Solutions's revenue is expected to grow by 8.4% 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 efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).
Skyworks Solutions's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
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.
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.
A company's financial position is much like your own financial position,
it includes everything you own
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.
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.
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
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
Skyworks Solutions has no debt, it does not need to be covered by short term assets.
Nearly all companies have debt. Debt in itself isn’t
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.
Skyworks Solutions has not taken on any debt in the past 5 years.
Skyworks Solutions has no debt, it does not need to be covered by operating cash flow.
Skyworks Solutions has no debt, therefore coverage of interest payments is not a concern.
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.
TENURE AS CEO
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.
Liam's compensation has been consistent with company performance over the past year.
Liam's compensation appears reasonable for a company of this size and profit level.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Skyworks Solutions management team is less than 2 years, this suggests a new team.
CEO, President & Director
CFO & Senior VP
Chief Technology Officer
Vice President of Worldwide Operations
Vice President of Investor Relations
Vice President of Strategy & Corporate Development
Senior Vice President of Sales and Marketing
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Skyworks Solutions board of directors is about average.
Is Skyworks Solutions Inc (NASDAQ:SWKS) A Buy At Its Current PE Ratio?
Formula Price-Earnings Ratio = Price per share ÷ Earnings per share P/E Calculation for SWKS Price per share = $104.11 Earnings per share = $4.475 ∴ Price-Earnings Ratio = $104.11 ÷ $4.475 = 23.3x The P/E ratio isn’t a metric you view in isolation and only becomes useful when you compare it against other similar companies. … For example, if you accidentally compared higher growth firms with SWKS, then SWKS’s P/E would naturally be lower since investors would reward its peers’ higher growth with a higher price. … Alternatively, if you inadvertently compared less risky firms with SWKS, SWKS’s P/E would again be lower since investors would reward its peers’ lower risk with a higher price as well.
Should You Buy Skyworks Solutions Inc (NASDAQ:SWKS) Now?
According to my valuation model, Skyworks Solutions seems to be fairly priced at around 17% below my intrinsic value, which means if you buy Skyworks Solutions today, you’d be paying a reasonable price for it. … Furthermore, it seems like Skyworks Solutions’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. … Skyworks Solutions’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value.
Skyworks Solutions Inc (NASDAQ:SWKS): What Is Driving Earnings Margins?
To get some insight, this article will interpret Skyworks Solutions's margin performance so investors can evaluate the revenue and cost drivers behind future earnings projections and understand how they may impact on returns compared to the industry. … Margin Calculation for SWKS Profit Margin = Net Income ÷ Revenue ∴ Profit Margin = 1.01 Billion ÷ 3.65 Billion = 27.67% The past five years have seen Skyworks Solutions's margin expand, due to average net income growth of 29.33% surpassing 17.34% in average revenue growth, indicating that that the previous revenue growth has been acompanied by a growing portion translated in to earnings. … This suggests future earnings growth is driven further by enhanced cost efficiency alongside revenue increases, which is enlarging the incremental amount of net income that is retained from the forecasted revenue growth.
Skyworks Solutions Inc (SWKS): Will The Growth Last?
After Skyworks Solutions Inc's (NASDAQ:SWKS) earnings announcement in September 2017, analyst consensus outlook appear cautiously subdued, with earnings expected to grow by 15.75% in the upcoming year compared with the higher past 5-year average growth rate of 29.02%. … In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for SWKS in the longer term. … I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of SWKS's earnings growth over these next few years.
With 2.4% Earnings Growth Lately, Did Skyworks Solutions Inc (SWKS) Outperform The Industry?
For Skyworks Solutions, the latest twelve-month earnings is $976M, which, against last year’s level, has declined by -0.22%. … This suggests that, generally, Skyworks Solutions has been able to grow its earnings over the past couple of years. … Over the past couple of years, Skyworks Solutions grew its bottom line faster than revenue by effectively controlling its costs.
Estimating The Fair Value Of Skyworks Solutions Inc (SWKS)
5-year cash flow forecast 2017 2018 2019 2020 2021 Levered FCF (USD, Millions) $1,111.50 $1,134.22 $1,264.65 $1,493.00 $1,731.88 Source Analyst x5 Analyst x5 Analyst x2 Analyst x1 Extrapolated @ (16%, capped from 18.54%) Present Value Discounted @ 10.03% $1,010.20 $936.91 $949.45 $1,018.73 $1,074.03 Present value of next 5 years cash flows: $4,989 After calculating the present value of cash flows in the intial 5-year period we need to calculate the Terminal Value, which accounts for all the future cash flows beyond the 1st stage. … Terminal Value Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g) Terminal Value = $1,732 × (1 + 2.5%) ÷ (10% – 2.5%) Terminal value based on the Perpetuity Method where growth (g) = 2.5%: $23,483 Present value of terminal value: $14,563 So the total value is the sum of the next 5 years cash flows and the terminal value discounted to today, this is known as the Equity Value. … Equity Value Equity Value (Total value) = Present value of next 5 years cash flows + terminal value = $4,989 + $14,563 = $19,552 The last step is to then divide the equity value by the number of shares outstanding.
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.
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