Skyworks Solutions Inc. (SWKS) is one of the weaker tech stocks today. The ticker continues to trade aggressively lower midday, now down nearly 10 percent ($27.80 -$3.05), printing the tape at a new 3-month low as it takes out the January low of $31.82. Weakness being attributed to brokerage firm Charter Equity, which this morning downgraded Skyworks shares to Underperform from Market Perform saying they believe [via Forbes] “Share loss to competitors and a change in phones RF architecture will likely reduce the company’s revenue per share from about $4 in iPhone 4 to $1-$1.50 in iPhone 5”. Skyworks gets over a quarter of its revenue from iPhone sales.
Technically speaking, SKWS remains very weak on the charts by trading way below the weekly and daily chart. The equity is also being traded below 50, and above 200-day moving averages, located respectively at $33.26 and $24.96 area. This indicates that the stock is in a significant downtrend. Traders and investors should watch for daily chart support around the $27.00 level. This level would be a bounce area for SWKS stock. Some mini-resistance levels may be formed for SWKS on these moves but without a sustained push back through these areas the ticker will remain vulnerable short term. Should the stock reverse lower after a weak bounce from the current levels the $26.00 area would be the next chart support.
From a valuation perspective, Skyworks shares trade at a 3.35x on a price to sales basis. The ticker has a trailing P/E of 30.27, a forward P/E of 13.60 and a P/E to Growth ratio of 1.15. The median Wall Street price target on the stock is $36.00 with a high target of $40.00.
Even though SWKS has a positive 52-wk change of 93.65%, the stock’s short-term slide since Feb.17 ($36.98) has attracted some bearish attention. Short interest accounts for 8.10% of Skyworks’ 184 million float, or 14.90 million shares.
At last check, $5.14B market cap SWKS was down $3.20, or 10.36%, to $27.67. Day’s range: $27.52 – $31.25 ; 52wk range: $13.75 – $37.82. Volume: over 9.2 million shares traded as of 12:46 p.m. EST vs 4.6 million daily (3m) average.
Disclosure: I currently hold no position, long or short, in Skyworks Solutions Inc.