Skyworks Solutions, Inc. (SWKS) DCF Valuation & Fundamental Primer
Skyworks Solutions, Inc. (SWKS) currently trades at $65.16 with an enterprise value of $10.69B. Our proprietary institutional model rates Skyworks Solutions, Inc. at 71/100 (Grade: B+ · Quality Software Operator). The current market price prices in an implied 5-year revenue CAGR of -7.5% vs. historical growth of -5.4% (Fairly Priced to Fundamentals).
Institutional fundamental teardown of Skyworks Solutions, Inc. (SWKS) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Skyworks Solutions, Inc. (SWKS) 3-Scenario DCF Valuation Range
Stress-test SWKS's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $65.16).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $79.30 +22% | $83.77 +29% | $88.99 +37% | $95.17 +46% | $102.57 +57% |
| 9.3% | $71.90 +10% | $75.43 +16% | $79.47 +22% | $84.17 +29% | $89.68 +38% |
| 10.0% | $65.80 +1% | $68.63 +5% | $71.85 +10% | $75.52 +16% | $79.75 +22% |
| 10.8% | $60.68 -7% | $63.00 -3% | $65.60 +1% | $68.53 +5% | $71.87 +10% |
| 11.5% | $56.33 -14% | $58.25 -11% | $60.38 -7% | $62.77 -4% | $65.46 +0% |
Institutional Software Quality Scorecard (71/100 · Grade B+)
Solid software model with clear operating leverage, partially offset by standard SBC or moderate burn.
Elite deferred revenue float; FCF exceeds operating income by >20%
Disciplined equity compensation well below software industry average
Sub-par gross margins; higher cost of delivery or hardware/services mix
Manageable debt load covered by recurring positive free cash flow
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 221% of EBIT driven by upfront annual collections
Key Operational & Dilution Risks
- Lower software gross margins (41.2%), indicating higher hosting or service delivery drag
Reverse-DCF Solver: What Growth is Priced Into SWKS?
Market implies -7.5% annual revenue growth over next 5 years (-4.3% dilution-adjusted), in line with company run-rate.
Headline Reverse-DCF ignores Stock-Based Compensation (5.7% of revenue) and annual share dilution (0.7%/yr). Accounting for both requires -4.3% 5-year revenue CAGR to justify $65.16/sh on a true per-share economic cash flow basis.
Skyworks Solutions, Inc. (SWKS) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $4.09B | $4.09B | $3.86B | $3.66B | $3.46B | $3.27B | $3.09B |
| Gross Profit | $1.68B | $1.68B | $1.59B | $1.50B | $1.42B | $1.35B | $1.27B |
| Operating Income (EBIT) | $500.0M | $499.8M | $472.7M | $447.0M | $422.7M | $399.8M | $378.1M |
| Stock-Based Compensation (SBC) | $232.4M | $232.5M | $219.9M | $208.0M | $196.7M | $186.0M | $175.9M |
| Unlevered Free Cash Flow (FCF) | $1.11B | $1.11B | $1.05B | $989.1M | $935.4M | $884.6M | $836.5M |
| SBC-Adjusted True Cash Flow | $873.4M | $873.4M | $825.9M | $781.1M | $738.7M | $698.6M | $660.6M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -9.7 + 0.43 × (Rule of 40) · R² = 69%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Skyworks Solutions, Inc. | SWKS | $9.69B | $4.09B | 41.2% | 27.1% | 21.6% | 5.7% | 2.4× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 2.4× | $9.73B | $9.69B | $65.16 | 0.0% |
| -20% Multiple Compression | 1.9× | $7.78B | $7.74B | $52.07 | -20.0% |
| -35% Multiple Compression | 1.5× | $6.32B | $6.28B | $42.26 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $20.43B | $20.39B | $137.16 | +110.0% |
Frequently Asked Questions: Skyworks Solutions, Inc. (SWKS) Valuation
What is Skyworks Solutions, Inc. (SWKS)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Skyworks Solutions, Inc. (SWKS) has a Base Case implied value of $71.64 per share (with a Bear Case of $52.75 and a Bull Case of $87.93), compared to its current price of $65.16. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Skyworks Solutions, Inc. (SWKS)'s Rule of 40 score and Free Cash Flow margin?
Skyworks Solutions, Inc. achieves a Rule of 40 score of 21.6%, combining a -5.4% revenue growth run-rate with a 27.1% TTM free cash flow margin on $4.09B in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into SWKS stock according to Reverse-DCF analysis?
At $65.16 per share (Enterprise Value of $9.73B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of -7.5%, compared to Skyworks Solutions, Inc.'s historical CAGR of -5.4%. Overall market expectations are rated as "Fairly Priced to Fundamentals".
How does Skyworks Solutions, Inc. compare to Software & Cloud Services software peers?
Skyworks Solutions, Inc. (SWKS) earns an institutional Software Quality Score of 71/100 (Grade B+ — Quality Software Operator). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact Skyworks Solutions, Inc. (SWKS)'s valuation?
Skyworks Solutions, Inc. recorded $232.4M in TTM stock-based compensation (5.7% of revenue). When treating SBC as a cash-equivalent compensation expense, Skyworks Solutions, Inc.'s SBC-adjusted free cash flow yield is 9.0%, scoring 21/25 on our Shareholder Dilution Friction pillar.