SWKS – Market expectations are for Uniform ROA to slightly improve, but management may have concerns about their supply chain, 5G competition, and the A&I acquisition

• Skyworks Solutions, Inc. (SWKS:USA) currently trades near recent averages relative to UAFRS-based (Uniform) earnings, with a 15.6x Uniform P/E. At these levels, the market is pricing in slightly bullish expectations for the firm, but management may have concerns about supply constraints for semiconductors, 5G competition, and the A&I acquisition.
• Specifically, management may lack confidence in their ability to resolve demand impediments caused by supply chain issues, maintain deep collaborative customer relationships, and lower their carbon footprint. In addition, they may be overstating the share of their fabrication process that was developed in-house and the potential of their A&I acquisition, and they may be downplaying concerns about the competition they may face in 5G. Finally, they may lack confidence in their ability to continue making effective R&D investments.