NASDAQ:SWKS appears to be flying under the radar despite its strong fundamentals.

Last update: Feb 4, 2025

Our stock screener has singled out SKYWORKS SOLUTIONS INC (NASDAQ:SWKS) as a stellar value proposition. NASDAQ:SWKS not only scores well in profitability, solvency, and liquidity but also maintains a very reasonable price point. We'll explore this further.

How We Gauge Valuation for NASDAQ:SWKS

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:SWKS has received a 7 out of 10:

SWKS's Price/Earnings ratio is rather cheap when compared to the industry. SWKS is cheaper than 89.81% of the companies in the same industry.
SWKS's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.36.
85.19% of the companies in the same industry are more expensive than SWKS, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 92.49. SWKS is valued rather cheaply when compared to this.
Based on the Enterprise Value to EBITDA ratio, SWKS is valued cheaply inside the industry as 87.04% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, SWKS is valued cheaper than 100.00% of the companies in the same industry.
The decent profitability rating of SWKS may justify a higher PE ratio.

Assessing Profitability for NASDAQ:SWKS

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:SWKS has earned a 6 out of 10:

The Return On Assets of SWKS (7.20%) is better than 70.37% of its industry peers.
SWKS's Return On Equity of 9.41% is fine compared to the rest of the industry. SWKS outperforms 64.81% of its industry peers.
Looking at the Return On Invested Capital, with a value of 8.10%, SWKS is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
The last Return On Invested Capital (8.10%) for SWKS is well below the 3 year average (12.13%), which needs to be investigated, but indicates that SWKS had better years and this may not be a problem.
Looking at the Profit Margin, with a value of 14.27%, SWKS is in the better half of the industry, outperforming 68.52% of the companies in the same industry.
SWKS has a better Operating Margin (18.84%) than 75.00% of its industry peers.

Unpacking NASDAQ:SWKS's Health Rating

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:SWKS scores a 8 out of 10:

SWKS has an Altman-Z score of 6.44. This indicates that SWKS is financially healthy and has little risk of bankruptcy at the moment.
SWKS has a Altman-Z score of 6.44. This is in the better half of the industry: SWKS outperforms 69.44% of its industry peers.
The Debt to FCF ratio of SWKS is 0.61, which is an excellent value as it means it would take SWKS, only 0.61 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 0.61, SWKS belongs to the best of the industry, outperforming 82.41% of the companies in the same industry.
A Debt/Equity ratio of 0.16 indicates that SWKS is not too dependend on debt financing.
A Current Ratio of 5.54 indicates that SWKS has no problem at all paying its short term obligations.
The Current ratio of SWKS (5.54) is better than 83.33% of its industry peers.
SWKS has a Quick Ratio of 4.24. This indicates that SWKS is financially healthy and has no problem in meeting its short term obligations.
SWKS has a Quick ratio of 4.24. This is in the better half of the industry: SWKS outperforms 77.78% of its industry peers.

Growth Analysis for NASDAQ:SWKS

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:SWKS scores a 4 out of 10:

SWKS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.48% yearly.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

More Decent Value stocks can be found in our Decent Value screener.

Check the latest full fundamental report of SWKS for a complete fundamental analysis.

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.