Stock Analysis | Skyworks Solutions Outlook - Technical Weakness and Mixed Analyst Sentiment

Market Snapshot

Takeaway: The technical outlook for Skyworks Solutions (SWKS) is weak, with a bearish edge according to our internal diagnostic score of 2.06.

News Highlights

Recent developments in the semiconductor sector suggest a mixed outlook for the industry. On May 30, McKinsey published a report highlighting the potential impact of U.S. tariffs on global chip supply chains. Additionally, Lansforsakringar Fondforvaltning AB announced a $11.77 million investment in NXP Semiconductors, indicating confidence in the sector's growth. However, indie Semiconductor faces challenges with its negative ROIC of -18.68%, raising questions about its long-term sustainability.

Analyst Views & Fundamentals

Analysts are divided on Skyworks Solutions. The simple average rating is 2.33, while the weighted rating, adjusted for historical performance, is 1.17. This shows a significant divergence in expectations.

• Average Rating (Simple Mean): 2.33
• Weighted Rating: 1.17
• Rating Consistency: There are differences among analysts, with one "Strong Sell" and two "Neutral" ratings in the last 20 days.
• Price Trend: The stock has fallen by 2.08% recently, aligning with the bearish market expectations.

On the fundamental side, key factors include:

• Net Profit Margin (NPM): 7.21% (Internal diagnostic score: 7.63)
• Operating Cash Flow (CFOA): 5.19% (Internal diagnostic score: 14.61)
• Gross Profit to Operating Assets (GPOA): 4.97% (Internal diagnostic score: 15.08)
• Interest Coverage Ratio: 22.53% (Internal diagnostic score: 7.60)
• Net Cash Flow from Operating Activities per Share YoY: -97.65% (Internal diagnostic score: 13.15)

While some fundamentals are strong, the recent drop in net profit growth and cash flow suggests caution.

Money-Flow Trends

Fund-flow data reveals positive trends among larger investors. Extra-large and large investors are showing a stronger inflow ratio compared to smaller ones, with the overall inflow ratio at 54.36%. This indicates that big money is more confident than retail traders, who are showing a negative trend in small accounts.

Key Technical Signals

Technically, Skyworks Solutions faces a challenging environment. The internal diagnostic technical score is 2.06, indicating a weak outlook. Key indicators include:

• MACD Death Cross: Internal diagnostic score: 1.0 (strongly bearish)
• Ex-Dividend Date: Internal diagnostic score: 1.0 (bearish pressure)
• Dividend Record Date: Internal diagnostic score: 1.0 (bearish influence)
• Bullish Engulfing: Internal diagnostic score: 1.0 (unexpectedly bearish)

Recent chart patterns like the MACD Death Cross and Ex-Dividend Date on August 26 and September 2 have reinforced bearish sentiment. With 4 bearish signals and 0 bullish, the momentum remains weak.

Conclusion

Given the weak technical signals, mixed analyst ratings, and fundamental concerns, it may be wise to consider waiting for a clearer trend before investing in Skyworks Solutions. While some large investors are showing interest, the overall market sentiment remains cautious. Watch for earnings and key industry catalysts in the coming months for a potential turning point.