Is Skyworks Solutions a Buy?
The share price of Skyworks Solutions (NASDAQ: SWKS) has rocketed more than 40% higher so far this year, which is a nice change of pace from 2018, when the stock couldn't stop crashing. Now that the stock has nearly erased last year's losses, it's a good time to reevaluate the company as an investment. Here's a look at how the semiconductor company has done recently, an assessment of the risks it's facing, and the opportunities that it has for growth.
Skyworks is coming off a relatively good fiscal fourth quarter in which it beat expectations for both earnings and revenue. Earnings for the period, which ended Sept. 27, came in at $1.52 per share, compared to the $1.50 per share that was the consensus expectation among analysts, and its $827 million in sales beat the $825 million that was forecast. However, since that report was released on Nov. 12 -- and the stock price set a new 52-week high -- shares of Skyworks have fallen by about 5%.
Although the company outperformed the forecasts, its annual sales fell 12.7% in fiscal 2019. Among the reasons for the decline were declining smartphone demand, as well as the loss of a significant customer when the U.S. Commerce Department placed Chinese tech giant Huawei on its Entity List, effectively preventing U.S. companies from doing business with it. The U.S. has eased some of the restrictions related to certain products which are not considered risks; those can now be sold to Huawei through temporary licenses. The U.S. recently extended that license into February 2020.
Source Fool.com
