Last week, you might have seen that Skyworks Solutions, Inc. (NASDAQ:SWKS) released its quarterly result to the market. The early response was not positive, with shares down 4.1% to US$108 in the past week. It was a credible result overall, with revenues of US$906m and statutory earnings per share of US$0.75 both in line with analyst estimates, showing that Skyworks Solutions is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Skyworks Solutions after the latest results.

Following the recent earnings report, the consensus from 26 analysts covering Skyworks Solutions is for revenues of US$4.24b in 2025. This implies a small 3.1% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to dip 8.3% to US$4.48 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.22b and earnings per share (EPS) of US$4.64 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 8.7% to US$115, suggesting the revised estimates are not indicative of a weaker long-term future for the business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Skyworks Solutions, with the most bullish analyst valuing it at US$140 and the most bearish at US$83.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.5% by the end of 2025. This indicates a significant reduction from annual growth of 8.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 18% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Skyworks Solutions is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Skyworks Solutions. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Skyworks Solutions' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Skyworks Solutions going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Skyworks Solutions that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com