Skyworks Solutions Is Not All About Apple

2015 was almost a bad year for Skyworks Solutions (SWKS), and the company is off to a bad start this year. Despite Apple (AAPL), and Skyworks Solutions itself, reporting a better-than-expected quarter, shares of Skyworks are still treading lower. In the most recent quarter, the company shared EPS and revenue of $1.24 and $751.7 million, beating its own guidance of $1.21 and $750 million, respectively.

Moreover, just when it appeared like Skyworks Solutions might be on its way to recovery several weeks ago, Brexit destroyed all hopes and terminated the impetus that it has gained.
Due to this, the value of stock dropped around 15 percent. However, Skyworks Solutions is poised to gain advantage from connectivity in the impending years.

As a matter of fact, mobile data usage and the number of connected devices look like assured bets to carry on escalating higher in this progressively digital world. Furthermore, apart from the growth in the number of devices and data usage, these devices are going to turn into more complexes in the coming years, which should create many opportunities for the company, whether it be in the automotive, tablets, wearables, IoT, or smartphones.

Although Skyworks Solutions has numerous catalysts, the most significant of them is the extension of 4G LTE networks. Moreover, the 4G smartphone implementation is still at its infant stage around the globe, and these smartphones use an extensive variety of wireless spectrum and frequency bands, which needs superior value chips. This is ultimately good news for the company as it a leading supplier of RF chips.

Furthermore, the long-term prospects of the company are still positive as it has realized that its massive dependence on Apple is not a good thing. Therefore, Skyworks Solutions has been trying hard to expand into new growth markets. Skyworks has strategized to become a frontrunner in the IoT trend, which could open a lot of new sales channels.

Skyworks Solutions’ movement used to replicate Apple’s movement in the past. However, the stocks moved in the opposite direction after the recent quarterly results. This can be seen as a positive as the market no longer associates Skyworks Solutions with just Apple.

Skyworks Solutions has its own identity now. Granted the recent downward movement was irrational, I think it is a great buying opportunity for long-term investors. Now that the market has realized that Skyworks Solutions isn’t completely dependent on Apple, the stock can breakout in the near future and looks like a good pick for long-term investors as well.
Published on Aug 9, 2016
By Akshansh Gandhi

Copyrighted 2020. Content published with author's permission.

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