Is Skyworks Solutions Stock Built to Withstand More Downside?

Skyworks Solutions (SWKS) stock is down 11.7% in 5 trading days. The recent slide reflects broader semiconductor industry challenges, inventory digestion, and uncertainty around its Qorvo merger, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?

Before judging its downturn reslience, let’s look at where Skyworks Solutions stands today.

• Size: Skyworks Solutions is a $8.7 Bil company with $4.1 Bil in revenue currently trading at $58.50.
• Fundamentals: Last 12 month revenue growth of -2.2% and operating margin of 12.8%.
• Liquidity: Has Debt to Equity ratio of 0.14 and Cash to Assets ratio of 0.17
• Valuation: Skyworks Solutions stock is currently trading at P/E multiple of 18.2 and P/EBIT multiple of 15.7
• Has returned (median) 60.1% within a year following sharp dips since 2010. See SWKS Dip Buy Analysis.

These metrics point to a Moderate operational performance, alongside Moderate valuation – making the stock Fairly Priced. For details, see Buy or Sell SWKS Stock

That brings us to the key consideration for investors worried about this fall: how resilient is SWKS stock if markets turn south? This is where our downturn resilience framework comes in. Suppose SWKS stock falls another 20-30% to $41 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.

2022 Inflation Shock

• SWKS stock fell 60.2% from a high of $199.66 on 26 April 2021 to $79.38 on 12 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $122.97 on 7 February 2023 , and currently trades at $58.50

 
2020 Covid Pandemic

• SWKS stock fell 47.0% from a high of $128.19 on 23 January 2020 to $67.90 on 16 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 4 June 2020

 
2018 Correction

• SWKS stock fell 47.8% from a high of $116.33 on 6 November 2017 to $60.72 on 3 January 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 19 December 2019

 
2008 Global Financial Crisis

• SWKS stock fell 66.0% from a high of $11.20 on 9 June 2008 to $3.81 on 5 December 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 15 July 2009

 
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