Skyworks Solutions' (NASDAQ:SWKS) fiscal 2019 second-quarter results were not pretty; the chipmaker was held back by a weak smartphone market. Revenue and earnings fell by double-digit percentages, as Skyworks gets around two-thirds of its revenue from the smartphone space.

Apple is Skyworks' largest customer, supplying nearly half of the chipmaker's revenue. Not surprisingly, Skyworks is going through a rough patch right now thanks to a decline in iPhone sales and a fall in global smartphone demand.

The company's results should serve as a reminder to Skyworks investors that the stock's momentum can continue only if its smartphone business turns around. But is that a possibility?

Person holding a smartphone in one hand.

Image Source: Getty Images.

Has the smartphone business hit bottom?

The smartphone market hasn't got off to a great start in 2019. Market research provider IDC has found that smartphone shipments in the first quarter of the year fell 6.6%. Apple suffered the worst year-over-year drop, with shipments declining by 30%.

Smartphone shipments fell 4.1% for all of 2018, and the bad start to the year has left the market tepid at best. So Skyworks' turnaround looks like a pipe dream at the moment.

There is, however, one catalyst that could help it beat the slowdown. The advent of fifth-generation (5G) wireless networks means that smartphone OEMs (original equipment manufacturers) will have to launch compatible devices that support the new network. The good news for Skyworks is that manufacturers are on track to launch a slew of 5G devices this year, which could give the chipmaker's smartphone business a nice boost.

Chip bellwether Qualcomm said at the beginning of the year that as many as 30 new 5G smartphones could hit the market in 2019. In fact, a few 5G devices have already hit the European market, and the number will only grow.

Skyworks will have a greater content opportunity in 5G smartphones, as these devices require more antennas to support higher data speeds. Skyworks is already working to capitalize on this opportunity with an updated portfolio of antenna-tuning solutions to ensure lower battery consumption and support higher data speeds simultaneously.

In fact, Skyworks has a broad portfolio of 5G-centric solutions that put it in a great position to take advantage of the proliferation of 5G devices. So don't be surprised if demand for Skyworks' mobile chips starts picking up the pace as the year progresses.

What's more, the opportunity should get bigger in subsequent years. The global 5G chipset market is expected to grow at a compound annual rate of 75%, according to Mordor Intelligence.

Skyworks' cheap valuation makes it attractive

Now that Skyworks' 5G catalyst doesn't seem to be far off, it would be a good idea for investors to take advantage of any pullbacks in the company's stock price, because it already trades at an attractive valuation.

The stock has a trailing price-to-earnings (P/E) ratio of 14.7, lower than the industry average of 20.3 and Skyworks' own five-year trailing P/E average of 21.2. It is even cheaper when you look at its forward earnings multiple of 13.2, indicating that the market expects bottom-line growth.

Analyst estimates compiled by Yahoo! Finance show an expectation that Skyworks' earnings will increase in the double digits next year after a decline in the current fiscal year. This is probably because the analysts expect the smartphone market to pick up the pace as the 5G catalyst kicks in.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.