Semiconductor company Skyworks Solutions (SWKS) recently completed the $2.75 billion acquisition of a unit of Silicon Laboratories (SLAB).
Let’s take a look at Skyworks’ latest financial performance and risk factors.
Q3 Financial Results and Outlook
Revenue increased 52% year-over-year to $1.12 billion in the fiscal third quarter of 2021 (ended July 2). Additionally, adjusted EPS was $2.15, representing an increase of 72% year-over-year.
What’s more, the company’s board of directors announced an increased quarterly cash dividend of $0.56 per share.
For Q4, Skyworks expects revenue to be in the range of $1.27 billion to $1.33 billion and adjusted EPS of $2.53. The company believes that the recently acquired business from Silicon Labs will contribute partially to its Q4 revenue.
Skyworks CEO Liam K. Griffin commented, “Looking ahead, we expect continued momentum as we execute on strong design wins with our mobile and broad markets customers.” (See Skyworks stock charts on TipRanks)
Skyworks’ Risk Factors
According to the new TipRanks Risk Factors tool, 31 risk factors have been identified for Skyworks. Finance and Corporate is the top risk category, accounting for 29% of the total risks. Production and the Ability to Sell are the next two major risk categories at 23% and 16%, respectively.
Since July, Skyworks has added three new risk factors, all under the Finance and Corporate category. Most of the newly added risks relate to the acquisition of a division of Silicon Labs. Skyworks cautions that the deal resulted in significant debt that could reduce the flexibility of running its business.
In addition, Skyworks warns that it may not achieve the expected benefits of the acquisition. If that is the case, it says costs could increase, which might have a negative impact on the company’s financial condition and business.
Analysts’ Take
Last week, Benchmark analyst David Williams reiterated a Buy rating on Skyworks stock with a price target of $225. Williams’ price target suggests 19.56% upside potential.
The analyst notes that Skyworks delivered solid Q3 results and issued upbeat guidance for Q4. Williams highlights that Skyworks has announced a number of new design wins, backed by significant growth and a fundamental boost for the company.
The consensus rating is a Moderate Buy based on 11 Buys and 5 Holds. The average Skyworks price target of $228.40 implies 21.37% upside potential to current levels.
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