NASDAQ:SWKS, an undervalued stock with good fundamentals.

SKYWORKS SOLUTIONS INC (NASDAQ:SWKS) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. NASDAQ:SWKS showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

ChartMill's Evaluation of Valuation

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:SWKS was assigned a score of 8 for valuation:

• SWKS is valuated reasonably with a Price/Earnings ratio of 10.54.
• 89.52% of the companies in the same industry are more expensive than SWKS, based on the Price/Earnings ratio.
• SWKS's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 23.48.
• The Price/Forward Earnings ratio is 9.82, which indicates a very decent valuation of SWKS.
• Based on the Price/Forward Earnings ratio, SWKS is valued cheaply inside the industry as 93.33% of the companies are valued more expensively.
• When comparing the Price/Forward Earnings ratio of SWKS to the average of the S&P500 Index (18.84), we can say SWKS is valued slightly cheaper.
• SWKS's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. SWKS is cheaper than 89.52% of the companies in the same industry.
• SWKS's Price/Free Cash Flow ratio is rather cheap when compared to the industry. SWKS is cheaper than 98.10% of the companies in the same industry.
• The decent profitability rating of SWKS may justify a higher PE ratio.
• A more expensive valuation may be justified as SWKS's earnings are expected to grow with 14.99% in the coming years.

Profitability Analysis for NASDAQ:SWKS

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:SWKS scores a 6 out of 10:

• With a decent Return On Assets value of 11.66%, SWKS is doing good in the industry, outperforming 70.48% of the companies in the same industry.
• SWKS has a Return On Equity of 16.16%. This is in the better half of the industry: SWKS outperforms 68.57% of its industry peers.
• SWKS has a Return On Invested Capital of 13.87%. This is in the better half of the industry: SWKS outperforms 73.33% of its industry peers.
• SWKS had an Average Return On Invested Capital over the past 3 years of 16.70%. This is above the industry average of 12.87%.
• SWKS's Profit Margin of 20.59% is fine compared to the rest of the industry. SWKS outperforms 74.29% of its industry peers.
• SWKS has a Operating Margin of 24.16%. This is in the better half of the industry: SWKS outperforms 76.19% of its industry peers.

Assessing Health Metrics for NASDAQ:SWKS

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:SWKS has received a 5 out of 10:

• SWKS has a debt to FCF ratio of 0.80. This is a very positive value and a sign of high solvency as it would only need 0.80 years to pay back of all of its debts.
• The Debt to FCF ratio of SWKS (0.80) is better than 79.05% of its industry peers.
• SWKS has a Debt/Equity ratio of 0.21. This is a healthy value indicating a solid balance between debt and equity.
• SWKS has a Current Ratio of 2.59. This indicates that SWKS is financially healthy and has no problem in meeting its short term obligations.

A Closer Look at Growth for NASDAQ:SWKS

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:SWKS, the assigned 4 reflects its growth potential:

• The Earnings Per Share is expected to grow by 13.14% on average over the next years. This is quite good.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
• The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Our latest full fundamental report of SWKS contains the most current fundamental analsysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.