Skyworks Solutions (SWKS) Stock Weighed Down by Apple Concern

Skyworks Solutions (SWKS) stock is declining in afternoon trading on Tuesday, as shares of some Apple chip suppliers fall after Credit Suisse warned of weak demand for the iPhone 6s.
By Rachel Graf ,

NEW YORK (TheStreet) -- Skyworks Solutions (SWKS) - Get Report stock is falling by 4.95% to $80.69 in afternoon trading on Tuesday, as Credit Suisse's note warning of lower iPhone 6s demand weighs on shares of Apple (AAPL) chip suppliers. 

Based in Woburn, MA, Skyworks is a semiconductor company that manufactures chips used in radio frequency and mobile communications systems.

Declines in shares of Apple chip suppliers "seems a little silly" since the suppliers just guided their quarters and gave commentary for March last week, Brean Capital semi analyst Mike Burton said, Barron's reports.

Burton's firm already has factored in some iPhone weakness for its forecast for Apple suppliers. 

Separately, TheStreet Ratings team rates SKYWORKS SOLUTIONS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

We rate SKYWORKS SOLUTIONS INC (SWKS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and impressive record of earnings per share growth. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 11.0%. Since the same quarter one year prior, revenues rose by 22.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SWKS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.41, which clearly demonstrates the ability to cover short-term cash needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SKYWORKS SOLUTIONS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Powered by its strong earnings growth of 31.11% and other important driving factors, this stock has surged by 31.86% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SWKS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • SKYWORKS SOLUTIONS INC has improved earnings per share by 31.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SKYWORKS SOLUTIONS INC increased its bottom line by earning $4.10 versus $2.37 in the prior year. This year, the market expects an improvement in earnings ($5.27 versus $4.10).
  • You can view the full analysis from the report here: SWKS

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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