Last update on 2024-06-07

Skyworks Solutions (SWKS) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

Skyworks Solutions (SWKS) achieves 6 out of 9 in 2023 Piotroski F-Score analysis, reflecting solid financial health and profitability. Discover key metrics.

Short Analysis - Piotroski Score: 6

We're running Skyworks Solutions (SWKS) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Skyworks Solutions (SWKS) has a Piotroski F-Score of 6, indicating a relatively strong financial position. The analysis covers profitability, liquidity, and operating efficiency. The company shows positive profitability with a net income of $982.8 million and operating cash flow higher than net income. Liquidity is also strong with a growing current ratio and decreasing leverage. Skyworks has been buying back shares, but there are concerns regarding its decreasing ROA, gross margin, and asset turnover ratio.

Insights for Value Investors Seeking Stable Income

Skyworks Solutions could be a good investment due to its solid profitability and liquidity despite some efficiency concerns. With a Piotroski F-Score of 6, it demonstrates strength in financial health. Investors may want to keep an eye on the company's efficiency metrics, but overall, it appears to be a worthwhile stock to consider.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Skyworks Solutions (SWKS)

Company has a positive net income?

Net Income indicates the company's profitability. A positive net income suggests that the company is profitable, while a negative net income indicates a loss.

Skyworks Solutions (SWKS) reported a net income of $982.8 million in 2023, marking a positive figure. This is not only crucial for meeting this criterion but also indicative of the company's profitability. Over the last 20 years, the net income has shown notable fluctuations, including years of significant growth and occasional declines. For instance, from a loss of -$451.416 million in 2003 to a net income of $1.4983 billion in 2021. Though the income declined from the peak in 2021, the $982.8 million in 2023 suggests a resilience in profitability, making this trend relatively strong. Thus, SWKS earns 1 point for this criterion.

Company has a positive cash flow?

Criterion examines whether the Cash Flow from Operations is positive or negative. This gauges a company's internal financing ability, crucial for long-term viability.

Skyworks Solutions' Cash Flow from Operations in 2023 stands at $1,856,400,000, which is positive. This earns them 1 point according to the Piotroski F-Score criteria. Over the last 20 years, the company's operating cash flow has seen significant improvement and stability, with $1,560,000 in 2021 and $1,424,600,000 in 2022. These figures affirm that the company has been able to consistently generate positive cash flows, showcasing its strong operational performance. In comparison, the initial negative OFC of $72,052,000 in 2003 indicates an upward trajectory that reflects robust management and business scaling.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures company efficiency in generating profit from total assets. Improved ROA signals better asset utilization.

The ROA for Skyworks Solutions (SWKS) decreased from 0.146 in 2022 to 0.1136 in 2023, indicating a less efficient use of assets recently. This decline in ROA suggests a reduced ability to generate profit from existing assets, which could be concerning for investors. Despite operational cash flow improvements, the drop reflects potential operational difficulties or increased competition as also reflected in the industry's median ROA, which trends significantly higher than Skyworks' current ROA.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income measures a company’s ability to generate cash. Strong cash flows being higher than net income often indicates quality earnings.

Skyworks Solutions (SWKS) presents an Operating Cash Flow of $1,856,400,000 compared to a Net Income of $982,800,000 in 2023. This yields a favorable trend as operating cash flow surpasses net income, granting them 1 point. Over the last 20 years, the disparity observed in 2003 and several subsequent years evidences prolonged strengthening in operating efficiency and quality of earnings. This trend hints that the company has been increasingly producing high-quality earnings. Hence, this is a positive signal for investors regarding the financial health of Skyworks Solutions.

Liquidity of Skyworks Solutions (SWKS)

Leverage is declining?

Changes in leverage, or financial leverage, indicate a company's debt levels. Lower leverage suggests reduced financial risk.

In 2022, Skyworks Solutions had a leverage ratio of 0.2138. By 2023, this decreased to 0.1402. Consistent with decreasing from 0.2771 in 2021, lowering leverage over recent years shows strong financial management and reduced risk.

Current Ratio is growing?

The Current Ratio measures a company's ability to pay off its short-term liabilities with its short-term assets.

Skyworks Solutions (SWKS) has seen an increase in its Current Ratio from 2.6326 in 2022 to 3.3269 in 2023. This means the company is now in a stronger position to cover its short-term liabilities using its short-term assets. Historically, SWKS has had a fluctuating current ratio, reaching as high as 9.5247 in 2016 and as low as 2.3963 in 2006. The current ratio of 3.3269 places it above the industry median of 3.4213 for the first time in recent years, which bodes well for the company's liquidity.

Number of shares not diluted?

Change in shares outstanding measures whether a company is repurchasing or issuing new shares. Decreased shares are seen as positive, as this usually indicates share buybacks, reflecting management's confidence.

For Skyworks Solutions (SWKS), the Outstanding Shares decreased from 162,400,000 in 2022 to 159,400,000 in 2023, which corresponds to a reduction of 3,000,000 shares. This trend is positive and awards the company a point for this criterion, as it signals share buybacks. Over the last 20 years, the number of outstanding shares shows fluctuations, but recent years (2019-2023) display a consistent reduction, aligning with the positive trend in 2023.

Operating of Skyworks Solutions (SWKS)

Cross Margin is growing?

Gross Margin is the percentage difference between sales and the cost of goods sold. It is a critical measure of a company's financial health and operational efficiency, reflecting its ability to translate sales into profits.

The Gross Margin for Skyworks Solutions (SWKS) decreased from 0.4748 in 2022 to 0.4416 in 2023. This reflects a deterioration in the company's profitability and operational efficiency. A lower Gross Margin implies that the company is generating less profit from each dollar of sales, which is not a positive trend. Moreover, the company has also underperformed compared to the industry median in 2023, which is 0.4919. Historically, Skyworks Solutions has maintained a competitive Gross Margin, with an average well above 0.4200 since 2003. The downward trend in the recent year highlights a potential concern that needs to be addressed. Therefore, for the purpose of Piotroski Analysis, Skyworks Solutions receives 0 points for Gross Margin as it has decreased in 2023.

Asset Turnover Ratio is growing?

The asset turnover ratio measures a company's efficiency in using its assets to generate sales. It is important as it shows how well the company is converting its assets into revenues.

In 2023, Skyworks Solutions (SWKS) recorded an asset turnover ratio of 0.5517, compared to 0.6282 in 2022. This represents a decrease in asset turnover, indicating a decline in the efficiency with which the company is using its assets to generate revenue. Over the past two decades, SWKS has seen fluctuations in its asset turnover ratio, with the highest point at 0.9736 in 2015 and a recent downward trend visible since 2018. Hence, for 2023, the asset turnover point is set to 0.