Yahoo Finance Earnings Beat: Skyworks Solutions, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
It's been a sad week for Skyworks Solutions, Inc. (NASDAQ:SWKS), who've watched their investment drop 12% to US$90.30 in the week since the company reported its second-quarter result. It looks like a credible result overall - although revenues of US$1.0b were in line with what the analysts predicted, Skyworks Solutions surprised by delivering a statutory profit of US$1.14 per share, a notable 15% above expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Skyworks Solutions
Taking into account the latest results, the current consensus, from the 26 analysts covering Skyworks Solutions, is for revenues of US$4.21b in 2024. This implies a small 7.3% reduction in Skyworks Solutions' revenue over the past 12 months. Statutory earnings per share are expected to fall 16% to US$4.45 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$4.44b and earnings per share (EPS) of US$4.79 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.
It'll come as no surprise then, to learn that the analysts have cut their price target 9.4% to US$105. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Skyworks Solutions analyst has a price target of US$154 per share, while the most pessimistic values it at US$83.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 14% annualised decline to the end of 2024. That is a notable change from historical growth of 9.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 17% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Skyworks Solutions is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Skyworks Solutions analysts - going out to 2026, and you can see them free on our platform here.
You can also see our analysis of Skyworks Solutions' Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
