Skyworks Solutions, Inc.
Thesis
Skyworks Solutions is undervalued due to market overreactions to a slowdown in Apple smartphone sales, which has led to a significant drop in stock price. The company has a strong revenue growth potential as the dollar content of RF components in smartphones increases, and it has a solid financial position with no leverage and excess cash for acquisitions.
Did it work?
The long thesis rested on undervaluation after an Apple-driven selloff and growth from rising RF content in smartphones, but nearly 10 years (118 months) later the stock is down 15.7%. Over a horizon this long, any reasonable stated target should have been achieved; instead the price declined, indicating the anticipated re-rating and content-growth-driven appreciation never materialized for shareholders. The thesis dynamics were decisively not borne out.