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For those who appreciate value investing, NASDAQ:SWKS is a compelling option with its solid fundamentals.

By Mill Chart

Last update: Nov 29, 2023

Our stock screening tool has pinpointed SKYWORKS SOLUTIONS INC (NASDAQ:SWKS) as an undervalued stock. NASDAQ:SWKS maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

How We Gauge Valuation for NASDAQ:SWKS

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NASDAQ:SWKS has achieved a 8 out of 10:

  • The Price/Earnings ratio is 11.10, which indicates a very decent valuation of SWKS.
  • Based on the Price/Earnings ratio, SWKS is valued cheaper than 91.43% of the companies in the same industry.
  • When comparing the Price/Earnings ratio of SWKS to the average of the S&P500 Index (24.46), we can say SWKS is valued rather cheaply.
  • The Price/Forward Earnings ratio is 10.35, which indicates a very decent valuation of SWKS.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of SWKS indicates a rather cheap valuation: SWKS is cheaper than 94.29% of the companies listed in the same industry.
  • The average S&P500 Price/Forward Earnings ratio is at 19.59. SWKS is valued slightly cheaper when compared to this.
  • SWKS's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. SWKS is cheaper than 89.52% of the companies in the same industry.
  • Compared to the rest of the industry, the Price/Free Cash Flow ratio of SWKS indicates a rather cheap valuation: SWKS is cheaper than 98.10% of the companies listed in the same industry.
  • SWKS has a very decent profitability rating, which may justify a higher PE ratio.
  • SWKS's earnings are expected to grow with 14.99% in the coming years. This may justify a more expensive valuation.

What does the Profitability looks like for NASDAQ:SWKS

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:SWKS scores a 6 out of 10:

  • The Return On Assets of SWKS (11.66%) is better than 71.43% of its industry peers.
  • SWKS has a better Return On Equity (16.16%) than 71.43% of its industry peers.
  • Looking at the Return On Invested Capital, with a value of 13.70%, SWKS is in the better half of the industry, outperforming 76.19% of the companies in the same industry.
  • SWKS had an Average Return On Invested Capital over the past 3 years of 16.64%. This is above the industry average of 12.18%.
  • The Profit Margin of SWKS (20.59%) is better than 75.24% of its industry peers.
  • The Operating Margin of SWKS (24.16%) is better than 78.10% of its industry peers.

How do we evaluate the Health for NASDAQ:SWKS?

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:SWKS has earned a 7 out of 10:

  • An Altman-Z score of 6.18 indicates that SWKS is not in any danger for bankruptcy at the moment.
  • SWKS's Altman-Z score of 6.18 is fine compared to the rest of the industry. SWKS outperforms 68.57% of its industry peers.
  • SWKS has a debt to FCF ratio of 0.80. This is a very positive value and a sign of high solvency as it would only need 0.80 years to pay back of all of its debts.
  • SWKS has a better Debt to FCF ratio (0.80) than 78.10% of its industry peers.
  • A Debt/Equity ratio of 0.16 indicates that SWKS is not too dependend on debt financing.
  • SWKS has a Current Ratio of 3.33. This indicates that SWKS is financially healthy and has no problem in meeting its short term obligations.
  • SWKS has a Quick Ratio of 2.16. This indicates that SWKS is financially healthy and has no problem in meeting its short term obligations.

What does the Growth looks like for NASDAQ:SWKS

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:SWKS has received a 4 out of 10:

  • Based on estimates for the next years, SWKS will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.14% on average per year.
  • The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
  • When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

More Decent Value stocks can be found in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of SWKS

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.

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SKYWORKS SOLUTIONS INC

NASDAQ:SWKS (2/21/2024, 10:44:42 AM)

102.455

-1.47 (-1.41%)

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