Skyworks receives PT hikes post-earnings; Avago, Anadigics rally

Skyworks (SWKS +6.8%) has received seven PT hikes after beating FQ1 estimates, issuing strong guidance, and reporting healthy margin expansion. RF component peers Avago (AVGO +1.4%) and Anadigics (ANAD +2.8%) have joined the list of names following Skyworks higher.

Needham's N. Quinn Bolton has raised his PT to $34 from $30, and considers Skyworks well-positioned to benefit from rising analog chip complexity and the proliferation of connected devices (i.e. the proverbial "Internet of Things").

He also notes Skyworks got an FQ1 lift from its inclusion in baseband chip giant Qualcomm's reference designs, and fast-growing Taiwanese baseband vendor MediaTek's quad-core 3G platform (popular in emerging market designs).

Though Skyworks expects its FQ2 sales to drop 7% Q/Q due to seasonality, the company guided on its CC (transcript) for an FQ2 gross margin of 44%-45%; at the midpoint, that's even with an FQ1 level of 44.5%.

Skyworks also mentioned it expects to add new customers for its end-to-end SkyOne RF front end platform (Samsung and HTC are already ramping). Skyworks is counting on SkyOne to help deal with pending competition from Qualcomm's innovative RF front end, announced 11 months ago to much fanfare.

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Comments (1)
  • Philip Marlowe
    , contributor
    Comments (1601) | Send Message
    Thank you for pointing out the many target price hikes SWKS received today. But this sentence in the last paragraph is a little puzzling: "Skyworks is counting on SkyOne to help deal with pending competition from Qualcomm's innovative RF front end..."


    I am pretty sure pending competition from Qualcomm is one of the lesser concerns of Skyworks nowadays. Qualcomm has had no success with their RF front end thus far, there have been no announced design wins, and SWKS management was clear that Qualcomm competition was not a factor when they were trying to sell SkyOne. It would be more correct to say that "Skyworks is counting on SkyOne to increase revenues and margins and gain market share by integrating several different chips (some of which would have otherwise been provided by competitors) into a single more efficient and cost effective package. "
    17 Jan 2014, 02:39 PM Reply Like
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