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  • Writer's pictureIshfaaq Peerally

Skyworks Solutions 1Q21 Earnings Analysis

Skyworks Solutions Stock Analysis


  • Essential to 5G and IoT

  • $25 in revenues per 5G chip vs $18 per 4G chip

  • Diversifying away from mobile technology into EV and others

Financial Analysis

  • Record quarterly revenues of $1.51 billion up 58% sequentially and 69% YoY

  • EPS of $3.05 up 103% YoY

  • FCF of $367 million up 27% YoY

  • Share repurchase program of $2.0 billion expiring in January 2023

  • Still good balance sheet with $617 million in cash and cash equivalents and no long-term debts


  • Assumptions

    • Use data from Qualcomm, American Tower, and Skyworks Solutions to estimate the growth of 5G technology

    • Qualcomm estimates 2.8 billion 5G connections by 2025

    • Annual growth of smartphone sales at 3%

    • Skyworks Solutions will have half of market share according to analysts

    • Take a margin of safety giving them only 20% of market share

    • FCF margin of 28%

    • Discount Rate of 9%

    • Terminal Growth Rate of 3%

    • Ignore non-mobile business (another margin of safety)

Skyworks Solutions Stock Analysis
  • Exit Multiples analysis

    • based on 2025 FCF with current P/FCF of 34 ranging from 12 to 36 in the last 5 years

    • 20% higher/lower FCF in bull/bear cases

    • Number of shares outstanding 10% lower at 147 million

Skyworks Solutions Stock Analysis


  • Annual expected returns of 13% with mostly focused on mobile business with huge margin of safety

  • Hold for the moment with record price but definite buy at any correction

Read the full analysis on my research partnership:

Skyworks Solutions Stock Analysis

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