Why Has Skyworks Solutions Stock Dropped 20% Despite A Jump In Sales?

SWKS: Skyworks Solutions logo
SWKS
Skyworks Solutions

Skyworks Solutions Inc. (NASDAQ: SWKS) stock price has lost 40% from $153 at 2020 end, to around $91 currently, primarily due to unfavorable changes in its P/S multiple. The company, in fact, witnessed a rise in sales and a drop in its outstanding share count over this period, but still failed to outperform the S&P, which returned just around 2% over this period.

In our interactive dashboard, Why Skyworks Solutions Stock Moved: SWKS Stock Has Lost 40% Since 2020, we break down the factors behind this move.

(A) Skyworks’ Total Revenue has grown 42% from $3.4 billion in FY 2020 to $5.1 billion currently

  • Skyworks’ total revenue has risen strongly from $3.4 billion in FY ’20 to $5.1 billion in FY ’21 (Skyworks’ fiscal year ends in September), and currently stands at around the same level.
  • As of FY ’21, 63% of Skyworks’ sales come from the United States, where the company sold $3.23 billion worth of its products.
  • Taiwan and China came in second, bringing in around 27% of the company’s sales.
  • As of FY ’21, the company operates across only one business segment, manufacturing semiconductors for use in radio frequency and mobile communications systems.
  • For details about Skyworks Solutions revenues and comparison to peers, see Skyworks Solutions (SWKS) Revenue Comparison
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(B) Revenue per share (RPS) increased 55% from $19.93 in FY ’20 to $30.93 currently

  • SWKS revenue rose from $3.4 billion in FY ’20 to $5.1 billion currently, while the outstanding share count decreased from 168.3 million in FY ’20 to 163.5 million currently.
  • Due to this, RPS has risen from $19.93 in FY ’20 to $30.93 currently.

(C) Price-To-Sales (P/S) multiple for Skyworks Solutions dropped from 7.3x in 2020-end to 4.9x by 2021-end and has further pulled back to 2.9x currently, much lower than its 2020 level

  • Despite Skyworks’ stellar performance since FY ’20, its P/S multiple has dropped around 60% from 7.3x in 2020 to 2.9x currently.
  • For additional details about the company stock returns and comparison to peers, see Skyworks Solutions (SWKS) Stock Return Comparison.

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Returns Jul 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 SWKS Return -2% -41% 22%
 S&P 500 Return 1% -20% 71%
 Trefis Multi-Strategy Portfolio 3% -25% 200%

[1] Month-to-date and year-to-date as of 7/4/2022
[2] Cumulative total returns since the end of 2016

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