Is Skyworks Solutions (SWKS) Stock Attractive for Long-Term Investors Amid Mixed Earnings and Valuation Signals?

The semiconductor industry has long been a magnet for long-term investors, but Skyworks Solutions (SWKS) presents a nuanced case. Recent earnings reports and valuation metrics reveal a stock caught in a tug-of-war between strong short-term performance and uncertain long-term growth. For investors weighing the merits of SWKS, a closer look at its price-to-earnings (P/E) ratio trends, earnings consistency, and industry positioning is essential.

Earnings Performance: A Tale of Resilience

Skyworks Solutions has demonstrated remarkable resilience in its quarterly earnings. For Q3 2025, the company reported an EPS of $1.33, exceeding the consensus estimate of $1.24 by $0.09, while revenue of $965 million outperformed expectations of $940 million. This momentum continued into Q4 2025, with a non-GAAP diluted EPS of $1.76, surpassing analysts' $1.31 forecast. Over the past five quarters, SWKS has consistently delivered above-estimate results, with EPS ranging from $1.20 to $1.76.

However, the broader picture is less rosy. While the company's 10-year average EPS growth rate stands at 7.70%, its trailing 12-month EPS growth has turned negative, averaging -17.50%. This divergence highlights a critical question: Is SWKS' recent earnings strength a sustainable trend, or a temporary rebound in a sector facing broader headwinds?

Valuation Metrics: A Mixed Bag

Skyworks' valuation metrics tell a story of volatility. As of September 22, 2025, its P/E ratio was 17.43, but by October 29, 2025, it had risen to 32.10. This fluctuation aligns with the company's trailing twelve months (TTM) P/E of 31.66, which is significantly higher than its 10-year historical median of 18.68.

Comparing SWKS to its peers, the semiconductor sector's average P/E in 2025 is approximately 36.95, with the U.S. industry trading near its 3-year average of 51.6x. While Skyworks' current P/E appears relatively attractive compared to sector averages, its forward-looking metrics are less compelling. Analysts project an annual EPS growth rate of 10.2% for 2025–2027, lagging behind the sector's forecast of 31.81%. This suggests that while SWKS may be undervalued relative to peers, its growth trajectory is insufficient to justify a premium valuation.

Future Growth: Innovation vs. Revenue Decline

Skyworks' long-term appeal hinges on its ability to innovate in high-growth areas such as 5G, Wi-Fi 7, and IoT. The company has emphasized cost management and operational efficiency to offset a projected annual revenue decline of -2.87% through 2027. While this strategy may bolster profitability, it raises concerns about the sustainability of top-line growth.

Industry benchmarks further underscore the challenge. The semiconductor sector is forecast to grow revenue by 21.49% annually through 2027, with the U.S. market averaging 11.92%. Skyworks' projected 2% annual revenue contraction positions it as a laggard, even as its earnings growth of 13.68% outpaces its own historical performance. This dichotomystronger margins but weaker revenuecould limit its appeal to investors seeking both profitability and scale.

Risk Considerations

The primary risk for SWKS lies in its valuation. A P/E of 31.66 is elevated relative to its 10-year median and implies that investors are paying a premium for modest growth. If the company fails to meet its 10.2% EPS growth target, the stock could face downward pressure. Additionally, its return on equity (ROE) of 9.95%, far below the industry average of 129.25%, signals inefficiencies in capital allocation that could erode investor confidence.

Conclusion: A Calculated Bet

Skyworks Solutions' stock offers a compelling mix of short-term earnings strength and a valuation that appears reasonable relative to sector averages. However, its long-term attractiveness is contingent on its ability to reverse revenue declines and outperform industry growth projections. For investors with a high risk tolerance and a belief in the company's innovation roadmap, SWKS could be a strategic addition to a diversified portfolio. Yet, those prioritizing consistent revenue growth and robust ROE may find the stock's current trajectory insufficient.

In a sector defined by rapid technological shifts, Skyworks' success will depend on its capacity to adapt-and deliver-on its promises.