Analysts Agree: Buy The Skyworks Dip

Skyworks Solutions Inc SWKS shares were sliding Tuesday following the release of fourth-quarter results.

Unfazed by the dip, sell-side analysts unanimously recommended buying the shares of this Apple Inc. AAPL supplier.

Skyworks reported record quarterly revenues of $984.6 million, up 18 percent year-over-year, and non-GAAP earnings per share of $1.82, up 24 percent. The company also guided first-quarter revenues to increase 15 percent to $1.05 billion and non-GAAP earnings to rise 19 percent to $1.91.

The results exceeded the Street forecast, while the guidance was in line.

At the time of writing, shares of Skyworks were sliding 5.78 percent to $109.61.

Oppenheimer: Long-Term Buyers 

Oppenheimer said it remains a long-term buyer of Skyworks shares, given the company's consistent execution, double-digit revenue growth, solid gross margin, operating margin and free cash flow margin profile, analyst Rick Schafer said in a Monday note. 

The upside was toned down by the constrained/staggered iPhone build peak, Schafer said. This is despite the analyst modeling about 15 percent iPhone 8/X or gen/gen content increase. (See Schafer's track record here.) 

Skyworks' iPhone unit demand forecasts are conservative, especially as sell-through is unknown this early in the ramp, the analyst said. Beyond Apple, Skyworks' growth is fueled by broad markets and SAMSUNG ELECTRONIC SSNLF/China handset gains, he said. 

Oppenheimer has an Outperform rating on the shares of Skyworks and a $120 price target.

Multiple Growth Drivers Fuel Skyworks 

Ramping sales to Apple's iPhone 8/X launch, strong sales to leading Android OEMs and strong broad market growth led to top-line growth at Skyworks, CANACCORD Genuity analyst Michael Walkley said in a Monday note.

The RF total addressable market for smartphones is a growth market for the company over the next several years, the analyst said. (See Walkley's track record here.) 

"Further, we believe Skyworks' diverse analog portfolio positions its broad market division for double-digit annual growth driven by content share in markets such as 802.11a c, automotive and the IoT markets," Walkley said. 

CANACCORD Genuity reiterated its Buy rating on the shares of Skyworks and raised its price target from $117 to $125 based on the newly introduced 2019 estimates.

Customer Diversification, M&A Possibility Could Lead Shares Higher

With Skyworks continuing to diversify away from being solely an Apple supplier and the likelihood of the company being an M&A target in the wake of the ongoing consolidation in the chip sector, its shares could move higher, Tigress Financial's Ivan Feinseth said in a note.

Feinseth recommends using any post-earnings weakness as a buying opportunity. He attributed the better-than-expected Q4 results to increased demand for the company's communication chips and strength in iPhone sales. (See Feinseth's track record here.)

The company's chips drive connectivity for all types of connected and mobile devices, the analyst said. 

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Photo courtesy of Skyworks.