Skyworks Solutions Inc SWKS
Component supplier to wireless infrastructure whose economics hinge on scale in a commoditizing technology layer rather than proprietary lock-in.
Management holds this up; Valuation is the soft spot.
| Moat | 2.0 |
| Management | 5.0 |
| Valuation | 2.0 |
| Risk · 10 = lowest | 3.0 |
| Business model | 3.0 |
| Optionality | 3.0 |
The price needs 17.0% growth a year for ten years. The AI thinks 5.5% is achievable, at a 8.0% margin.
Skyworks looks expensive because the market is pricing in aggressive long-term growth that the company's thin competitive position and cyclical industry make unrealistic. The Qorvo merger should help through scale and diversification, but even optimistic assumptions only get you to mid-single-digit growth and modest margin recovery. The main risk is that cyclical weakness or integration hiccups keep returns on capital low for years.
Skyworks Solutions, Inc., together with its subsidiaries, develops, manufactures, and markets analog and mixed-signal semiconductor products and solutions in the United States, Taiwan, China, South Korea, Europe, the Middle East, Africa, and the Asia Pacific. The company offers amplifiers, antenna tuners, attenuators, automotive tuners and digital radios, wireless ASoC, DC/DC converters, demodulators, detectors, digital power isolators, diodes, directional couplers, diversity receive modules, filters, front-end modules, hybrids, light emitting diode drivers, low noise amplifiers, mixers, modulators, and optocouplers/optoisolators. It also provides phase locked loops, phase shifters, power dividers/combiners, power over ethernet, power isolators, ProSLIC family of subscriber line interface circuits, receivers, system in package, switches, synthesizers, timing devices, voltage-controlled oscillators/synthesizers, and voltage regulators. The company sells its products through direct sales force, electronic component distributors, and independent sales representatives. Its products are used in aerospace, automotive, broadband, cellular infrastructure, connected home, defense, entertainment and gaming, industrial, medical, smartphone, tablet, and wearables applications. The company was founded in 1962 and is headquartered in Irvine, California.
Write why this business works, set your own fair value, and let the briefing speak only when a rule you wrote is crossed.
Start the thirty days · no card