SWKS Price


Skyworks will announce earnings on July 23, and they told last quarter that they expect to report $1.28 in adjusted earnings.

The $1.28 reflects about 54% in growth QoQ, and at today’s price of $98.36, reflects a QoQ increase in the stock price of 185% and a P/E of 20.4.

Here is a simple table (which uses adjusted earnings) that tells a nice story (I left out $/share and earnings from the table to emphasize these numbers).

Period	QoQEPS	QoQ$/Sh	P/E
Jun-14	54%	137%	16.8
Sep-14	75%	180%	18.1
Dec-14	88%	215%	19.1
Mar-15	85%	266%	22.8
Jun-15	54%	187%	20.4*assuming $1.28 in Jun-15 quarter*

Over this same time period, the P/E has ranged between 12.4 & 23.6. The P/E has expanded rather nicely with earnings expansion.

Analysts do not expect sales and earnings to expand as fast going forward as they have the last few quarters (Yahoo analyst expectations).

	2015	2016	Growth
Rev Est	3.23B	3.65B	13%
EPS Est	$5.12	$5.93	16%

*these appear not to be adjusted numbers*

This is quite a drop-off in expectations!

Will sales slow down this much? Probably not. Revenues would have to slow to a crawl, to barely more than the June, 2015 expected revenue for each of the next 4 quarters.

Rev.	Mar	Jun	Sep	Dec
2012	364.7	389.0	421.1	453.7
2013	425.0	436.1	477.0	505.2
2014	481.0	587.0	718.2	805.5
2015	762.1	*801.2 estimate* 

So it looks like there is a lot of volatility in the P/E range and that analysts either expect the business to slow a lot or they’re not paying much attention to the business. I suspect that they are being too conservative. It would be nice to go back a year to see what they expected for the past 12 months.

Looking at these data points, I am betting that 1) today’s price is a good price, 2) there will be a lot of volatility in the share price, 3) analysts will continually increase both revenue and earnings estimates during the next year resulting in a higher price and 4) these aspects combined will result in continually good value points to buy more.

Hopefully, for those of us that don’t have enough exposure to Skyworks, we’re able to buy more on the recent dip. If not, we’ll probably get a chance to buy more at equally good value points over the next year.