Skyworks Solutions Outlook - A Weak Technical Picture Amid Pessimistic Fundamentals

Market Snapshot

Takeaway: Skyworks Solutions (SWKS.O) is under pressure from bearish technical signals and weak fundamentals. Our internal diagnostic scores highlight a fragile outlook: the technical score is a low 1.88 (of 10), while the fundamental model scores at 2.29 and the fund-flow model is stronger at 7.55.

News Highlights

Recent news has highlighted broader semiconductor industry challenges and policy shifts:

• McKinsey report on tariffs suggests potential disruption in chip supply chains, which could pressure players like Skyworks if trade policies remain volatile.
• Japan-U.S. cooperation proposals aim to counter China's dominance and address supply chain bottlenecks—potentially a positive for the industry, but likely to have a delayed impact on SWKS.O.
• Semiconductors ETF outflow of $750 million in May 2025 signals a broader investor shift, which may continue to weigh on sector stocks including Skyworks Solutions.

Analyst Views & Fundamentals

Analyst ratings are mixed, with a simple average score of 2.33 and a performance-weighted score of 1.17. These scores reflect a generally pessimistic outlook, as most analysts either rate the stock as "Underperform" or "Strong Sell."

The recent price trend has been a fall of -0.27%, which aligns with the bearish expectations from analysts.

Key fundamental factors and model scores (internal diagnostic scores):

• EV/EBIT: 108.80 (model score: 3.00) – Elevated enterprise value relative to EBIT indicates weaker valuation attractiveness.
• Net cash flow from operating activities per share (YoY growth rate): -93.20% (model score: 2.00) – Sharp decline in cash flow raises concerns.
• Net profit attributable to parent company shareholders / Net profit: 100.00% (model score: 2.00) – Suggests full retention of profits, but growth is absent.
• Net cash flow from operating activities (YoY growth rate): -26.84% (model score: 1.00) – Further evidence of weakening cash generation.
• Interest coverage ratio: 22.53% (model score: 3.00) – Suggests healthy coverage but with limited upside potential.
• Diluted earnings per share (YoY growth rate): -43.97% (model score: 1.00) – Sharp earnings contraction signals declining performance.

Money-Flow Trends

Big-money and retail investors are both showing cautious optimism, with inflow ratios above 50% across all sizes of investment:

• Small inflow ratio: 51.11%
• Medium inflow ratio: 50.08%
• Extra-large inflow ratio: 56.52%
• Overall inflow ratio: 54.44%

While institutional flows are positive, they contrast with the bearish technical outlook. This suggests that short-term money is flowing in, but long-term fundamentals and technical momentum remain weak.

Key Technical Signals

Our internal diagnostic scores are extremely weak on the technical front:

• MACD Death Cross: 1.00 – Strong bearish signal, historically associated with negative returns.
• Ex-Dividend Date: 1.00 – Often a sell-off trigger as investors adjust holdings pre-event.
• Bullish Engulfing: 1.00 – Surprisingly bearish given the name; historically signals decline.
• Hanging Man: 1.00 – Classic bearish reversal pattern.

Recent chart patterns include:

• 20250826: Ex-Dividend Date, Dividend Record Date
• 20250908: Hanging Man pattern forms, signaling potential top reversal.
• 20250902: MACD Death Cross confirms bearish momentum.

With 5 bearish indicators out of 6 analyzed and no bullish ones, the technical side is clearly weak. The model suggests avoiding the stock at this time.

Conclusion

Investors should consider waiting for a pull-back or clearer signs of improvement. The technical side is extremely bearish, fundamentals show declining performance, and analyst sentiment is mixed with a bias toward underperformance. While fund flows remain positive, they should be viewed as short-term rather than indicative of a long-term turnaround. Investors are advised to monitor the next earnings report for any reversal signs or further deterioration.