On November 4, 2021, Skyworks Solutions’ market share fell 4% after the company launched its 2021 budget quarterly results. Investors are not impressed by the chipmaker direction for the current quarter.
However, discerning investors should not forget that Skyworks sits on the secular catalysts and has a strong customer base that can help it utilize the latest technology trends. That may be the reason why the market is moving its average price target of $ 208 – 27% above its current market price. What’s more, the stock analyst price index of $ 255 points to 56% upside from current levels of around $ 163.
Let’s see why Skyworks can hit those charging sites.
Skyworks Solutions provides seamless development
Skyworks recorded 37% year-over-year growth in the fourth quarter of fiscal 2021, delivering record revenue of $ 1.31 billion. Non-GAAP corporate earnings rose 42% during the year before to $ 2.62 per share in the last quarter. Skyworks revenues increased 52% to $ 5.1 billion for the full year, while adjusted earnings increased 71% to $ 10.50 per share.
Skyworks’ huge growth was driven by the boom demand for 5G smartphones, and the growing demand for its chips in other areas such as the Internet of Things, industrial applications, car, and even gaming – which together it is part of the company’s major product portfolio. .
Mobile business generated 71% of Skyworks revenue in the last quarter and recorded 40% year-over-year growth. Skyworks points out that its chips “are powered by new launches in the Tier 1 smartphone maker [original equipment manufacturers (OEMs)] supports more than 20 platforms. “Such impressive growth in the mobile business is not surprising, as Skyworks receives most of its revenue from Apple.
IPhone maker accounted for 59% of Skyworks’ revenue in 2021. Not surprisingly, Apple’s development during the 5G era was well off on the chipmaker. Apple reported moving 50.4 million iPhones in the third quarter of 2021 according to IDC estimates, up nearly 21% from a year ago.
Meanwhile, the first requirement for the iPhone 13 seems to have surpassed last year’s iPhone 12, as pre-orders indicate. That’s great news for Skyworks, as its chips are being used by Apple on the iPhone 13. Essentially, the chipmaker is making more money from each version of the iPhone 13 compared to last year’s devices, according to CFO Kris Sennesael on new conference call assets.
However, supply chain disruptions and shortages will weigh on Apple sales in the current quarter. Third-party reports indicate that Apple may be forced to cut production of the iPhone 13 by 10 million units this year, which seems to be why Skyworks is offering a cold cut.