Skyworks Solutions, Inc. SWKS
Verdict: Hold. Fair value $89.63 against a price of $66.63 on 6 Jan 2026, 35% above the price.
In plain words
The case for: Narrow competitive moat provides durability. Industry tailwinds with growing market.
The case against: Competitive moat at risk of erosion. Intense competitive pressure could compress margins.
Main risks
- Severe Revenue & Profit Decline: Revenue has fallen 25% and Net Income by 62% since 2022, indicating a major cyclical downturn or loss of competitive positioning.
- Value-Destructive Capital Allocation (Negative ROIIC): Estimated 3-year ROIIC is highly negative (~-70%), suggesting recent investments have failed to generate positive returns and coincided with a steep profit decline.
- Significant Margin Compression: Net margin has contracted from over 23% in 2022 to under 12% currently, a faster decline than revenue, pointing to pricing pressure or operational deleverage.
- Intense competitive environment
- Competitive moat at risk of erosion