Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 13.9%. Since the same quarter one year prior, revenues slightly increased by 9.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in 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. To add to this, SWKS has a quick ratio of 2.40, which demonstrates the ability of the company to cover short-term liquidity needs.
- SKYWORKS SOLUTIONS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SKYWORKS SOLUTIONS INC increased its bottom line by earning $1.19 versus $0.75 in the prior year. This year, the market expects an improvement in earnings ($1.88 versus $1.19).
- Compared to its closing price of one year ago, SWKS's share price has jumped by 48.65%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- 47.10% is the gross profit margin for SKYWORKS SOLUTIONS INC which we consider to be strong. Regardless of SWKS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 12.70% trails the industry average.
Skyworks Solutions, Inc., together with its subsidiaries, offers analog and mixed signal semiconductors worldwide. The company provides power amplifiers and front-end solutions for cellular handsets from entry level to multimedia platforms, as well as smart phones. The company has a P/E ratio of 27.6, above the average electronics industry P/E ratio of 26.5 and above the S&P 500 P/E ratio of 17.7. Skyworks has a market cap of $5.47 billion and is part of the
industry. Shares are up 82.7% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.