Few Indicators Flashing Warning Signs for Skyworks Solutions, Inc. (SWKS)

Let’s reassess the active stocks with an eye toward SWKS stock. Just how should we respond to Thursday’s drubbing? Is the mighty fruit now destined to decay? Or is this a mere bruising and nothing more? On 14 March, shares of Skyworks Solutions, Inc. (NASDAQ:SWKS) closed lower after a volatile session. The shares dropped -0.34 points or -0.42 percent at $81.43 with a light trade volume of 1.993 million shares. After opening the session at $81.88, the shares went as high as $82.85 and as low as $81.01, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $14.4 billion and now has 176.6 million shares outstanding. Skyworks Solutions, Inc. (SWKS) stock has lost -2.57 percent of market value in 21 trading days.

SWKS stock has a trailing 3-year beta of 0.69, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $6.07 a share in the trailing twelve months. The stock’s value has surged 21.5 percent year to date (YTD) against a decline of -27.29 percent in 12 month’s time. The company’s shares still trade -27.42 percent away from its 1-year high of $112.20 and 35.46 percent up from 52-week low of $60.12. The average consensus rating on the company is 2.4, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Skyworks Solutions, Inc. (SWKS) will probably climb 14.56 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $100-month high price target. This represents a whopping 22.8 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $90, which represents a return potential of 10.52 percent when compared to the closing price of the stock of $81.43 on Thursday, March 14. The lowest price target for the stock is $70 — slightly more than -14.04 percent from SWKS’s current share price.

History has shown that shares in Skyworks Solutions, Inc. have gone up on 23 different earnings reaction days and are predicted to add 0.07 percent when the company reports upcoming earnings. Investors will get their next glimpse of SWKS’s Q2 earnings on May 02. Analysts are forecasting revenue to suffer decline of -11.3 percent to $810M in the fiscal second quarter, while earnings are seen soaring by nearly -12.8 percent to $1.43 per share. It earned $1.83 per share, worse than the $1.84, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $972M, worse than the $979M analysts expected. Earnings are estimated to increase by 17.2 percent this year, 12.07 percent next year and continue to increase by 11.18 percent annually for the next 5 years.

The stock is currently hovering around the first support level of $80.68. Below this, the next support is placed in the zone of $79.92. Till the time, the SWKS stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 57.13 on daily chart, which may remain a cause for concern. If the price breaks below $79.92 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $82.52 mark may result into a pull-back move towards $83.6 level.

Shares of Skyworks Solutions, Inc. (SWKS) are trading at a P/E ratio of 13.47 times earnings reported for the past 12 months. The industry SWKS operates in has an average P/E of 9.03. Its P/E ratio went as low as 14.31X and as high as 23.25 over the 5-year span.Further, it is sporting a 3.8 on the Price-to-Sales ratio. Compare this with the industry average P/S of 12.25. 50.1 percent is the gross profit margin for Skyworks Solutions, Inc. and operating margin sits at 33.2 percent. Along with this, the net profit margin is 29.9 percent.