Skyworks Solutions, Inc. (NASDAQ: SWKS)

Sector: Technology Industry: Semiconductors CIK: 0000004127
Market Cap 10.70 Bn
P/B 6.99
P/E 51.17
P/S 8.05
ROIC (Qtr) 8.43
Div Yield % 1.21
Rev 1y % (Qtr) 7.34
Total Debt (Qtr) 1.17 Bn
Debt/Equity (Qtr) 0.20

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 1.30B provides robust 1.12x coverage of total debt 1.17B, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 1.16B provide 2.33x coverage of short-term debt 499.40M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 4.93B provides 4.23x coverage of total debt 1.17B, indicating robust asset backing and low credit risk.
  • Strong operating cash flow of 1.30B provides 3.50x coverage of SG&A expenses 371.50M, showing efficient operational cost management.
  • Operating cash flow of 1.30B provides exceptional 48x coverage of interest expenses 27.10M, showing strong debt service capability.

Bear case

  • Operating cash flow of 1.30B barely covers its investment activities of (234M), with a coverage ratio of -5.56, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 1.30B provides thin coverage of dividend payments of (432.60M) with a -3.01 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (234M) provide weak support for R&D spending of 785.50M, which is -0.30x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating earnings of 553.80M show weak coverage of depreciation charges of 463M, with a 1.20 ratio indicating high capital intensity and potential reinvestment needs.
  • Retained earnings of 5.66B provide limited buffer against comprehensive income items of (5.10M), which is -1109.20x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Semiconductors
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NVDA Nvidia Corp 4,497.97 Bn 958.24 362.10 10.48 Bn
2 TSM Taiwan Semiconductor Manufacturing Co Ltd 1,720.33 Bn 233.28 76.34 31.18 Bn
3 AVGO Broadcom Inc. 1,403.21 Bn 468.99 63.02 65.14 Bn
4 MU Micron Technology Inc 394.75 Bn 32.42 14.05 12.43 Bn
5 AMD Advanced Micro Devices Inc 338.24 Bn 102.31 10.56 3.87 Bn
6 INTC Intel Corp 290.80 Bn 1,468.67 5.44 46.55 Bn
7 TXN Texas Instruments Inc 218.71 Bn 121.98 16.49 14.05 Bn
8 QCOM Qualcomm Inc/De 204.52 Bn 46.63 8.43 14.81 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.29 4.17
EV to Cash from Ops. EV/CFO 32.33 -354.77
EV to Debt EV to Debt 8.77 92.03
EV to EBIT EV/EBIT 36.15 -37.72
EV to EBITDA EV/EBITDA 30.61 53.67
EV to Free Cash Flow [EV/FCF] EV/FCF 50.72 31.13
EV to Market Cap EV to Market Cap 0.96 0.81
EV to Revenue EV/Rev 7.69 29.10
Price to Book Value [P/B] P/B 6.99 17.08
Price to Earnings [P/E] P/E 51.17 69.83
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.10 2.39
Dividend Payout Ratio % Div Payout % (Qtr) 90.90 8.25
Dividend per Basic Share Div per Share (Qtr) 2.81 0.63
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 39.23 9.91
Interest Coverage Int. cover (Qtr) 20.44 8.38
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -24.20 -155.98
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -15.15 45.60
Dividend Growth (1y) % Div 1y % (Qtr) 2.55 5.64
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -19.70 26.23
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -11.55 47.12
EBIT Growth (1y) % EBIT 1y % (Qtr) -16.98 25.83
EBT Growth (1y) % EBT 1y % (Qtr) -17.24 39.93
EPS Growth (1y) % EPS 1y % (Qtr) -16.94 24.64
FCF Growth (1y) % FCF 1y % (Qtr) -33.69 244.42
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -2.25 43.10
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.52 0.49
Cash Payout Ratio Cash Payout (Qtr) 0.29 0.09
Cash Ratio Cash Ratio (Qtr) 0.88 2.23
Current Ratio Curr Ratio (Qtr) 2.33 5.43
Debt to Equity Ratio Debt/Equity (Qtr) 0.20 0.34
Interest Cover Ratio Int Coverage (Qtr) 20.44 8.38
Times Interest Earned Times Interest Earned (Qtr) 20.44 8.38
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 24.90 -112.38
EBIT Margin % EBIT Margin % (Qtr) 13.55 -91.98
EBT Margin % EBT Margin % (Qtr) 12.89 -132.25
Gross Margin % Gross Margin % (Qtr) 41.20 47.73
Net Profit Margin % Net Margin % (Qtr) 11.70 -133.26