Stock Analysis | Skyworks Solutions Outlook - A Cautious Technical Outlook Amid Mixed Analyst Signals

Market Snapshot

Takeaway: Skyworks Solutions (SWKS) is in a volatile state with a weak technical outlook, urging caution. Stance: Monitor for clarity amid mixed signals.

News Highlights

• May 30 - McKinsey Weighs In on Tariffs and Chip Supply Chains: New analysis from McKinsey & Co. highlights the uncertainty in the semiconductor industry due to evolving U.S. tariff policies. This could impact Skyworks’ operations in a globalized supply chain.
• May 30 - Japan to Offer U.S. Proposals for Cooperation on Rare Earths and Semiconductors: A collaborative push between Japan and the U.S. in semiconductor production could indirectly benefit Skyworks by reshaping supply chain dynamics and reducing reliance on China.
• May 29 - Executives from Intel and AMD Enter the AI Semiconductor Ring: A growing wave of AI-focused chip startups is emerging in India. This could increase competition in the AI chip market, where Skyworks might need to differentiate itself for growth.

Analyst Views & Fundamentals

Average Rating Score (Simple Mean): 2.33
Weighted Rating Score (Performance-Weighted): 1.17
Consistency: Analyst ratings are mismatched — "There are differences," with a mix of "Neutral" and "Strong Sell" calls in the last 20 days. The current price is up 9.58%, but expectations are pessimistic.

How These Scores Align with Price Trend: The stock is rising, but analyst expectations are downbeat, creating a mismatch between the price and sentiment. This divergence could hint at a potential pullback or a short-term correction.

Key Fundamental Factors and Model Scores

• Net Profit Attributable to Parent Company Shareholders / Net Profit (%) - 100.00 % (Score: 3.25)
  All profit goes to the parent company, indicating strong control, but the score suggests moderate confidence.
• Interest Coverage Ratio (EBIT / Interest Expense) - 22.53 % (Score: 2.46)
  The company can cover interest costs comfortably, but the low internal diagnostic score suggests room for improvement in financial leverage.
• Net Cash Flow from Operating Activities (YoY Growth Rate %) - -26.84 % (Score: 3.22)
  Cash flow is down compared to last year, signaling potential operational challenges.
• Diluted Earnings Per Share (YoY Growth Rate %) - -43.97 % (Score: 2.46)
  Significant earnings decline, highlighting weaker profitability performance.

Money-Flow Trends

Big money and retail flows are both negative for Skyworks. The overall inflow ratio is 46.64%, with larger investors showing the most concern. The block inflow ratio is 46.21%, indicating strong outflows from institutional positions.

Breakdown by size of investors:

• Small-trend: negative (inflow ratio: 48.74%)
• Medium-trend: negative (inflow ratio: 49.22%)
• Large-trend: negative (inflow ratio: 49.72%)
• Extra-large-trend: negative (inflow ratio: 44.63%)

Despite a recent price rise of 9.58%, the fund-flow score is 7.26 (internal diagnostic score, good), showing that larger players are cautiously optimistic but not aggressively bullish.

Key Technical Signals

The stock's technical outlook is weak, with an internal diagnostic score of 4.4. Recent indicators are mixed, with both positive and negative signals in play.

Indicator Breakdown

• Williams %R Overbought: Score: 3.22 (internal diagnostic score) — Neutral rise signal, suggesting overbought conditions but not necessarily a sell signal.
• RSI Overbought: Score: 2.46 — Neutral bias, indicating a potential correction could be due soon.
• Shooting Star: Score: 7.51 — Strong positive signal, suggesting a potential reversal pattern is forming.

Recent Chart Patterns by Date

• August 13: Williams %R Overbought
• August 15: Williams %R Overbought
• August 14: Williams %R Overbought and RSI Overbought
• August 19: Williams %R Overbought and Shooting Star (bullish reversal)
• August 18: Williams %R Overbought

Key Insights: Technical indicators suggest a volatile and unclear trend. Long and short signals are relatively balanced, and the market is likely to remain in a watchful state. Investors should pay close attention to whether the Shooting Star pattern leads to a reversal.

Conclusion

Given the mixed signals from both analysts and technical indicators, it may be wise for investors to wait for further clarity before making significant moves. While there is a strong positive candlestick pattern on the radar (Shooting Star), the broader trend remains weak and uncertain. Consider watching for a pullback or clearer breakouts in the coming weeks, particularly if earnings or sector news provide additional context.