SkyWater Technology (SKYT) AI Stock Analysis

• Market Cap: $1.32B
• Dividend Yield: N/A
• Average Volume (3M): 1.64M
• Price to Earnings (P/E): 10.6
• Beta (1Y): 2.25
• Revenue Growth: 0.19%
• EPS Growth: N/A
• Country: US
• Employees: 702
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.24
• Shares Outstanding: 48,508,000
• 10 Day Avg. Volume: 2,164,621
• 30 Day Avg. Volume: 1,644,508
• PEG Ratio: 1.26
• Price to Book (P/B): 11.82
• Price to Sales (P/S): 1.99
• P/FCF Ratio: 94.59
• Enterprise Value/Market Cap: 0.80
• Enterprise Value/Revenue: 3.05
• Enterprise Value/Gross Profit: 13.12
• Enterprise Value/Ebitda: 7.72
• 1Y Price Target: $21.50
• Price Target Upside: -21.27% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: $30.00 ▲(9.85% Upside)

The score is held back primarily by weak profitability, stressed cash flow, and high leverage, despite strong revenue growth. Offsetting positives include bullish technical momentum and a strong earnings call with upbeat guidance and Fab 25 execution; valuation also appears reasonable with a ~11 P/E.

Positive Factors

Sustained revenue growth

Consistent TTM revenue growth near 20% demonstrates expanding demand for SkyWater's specialty processes. Durable top-line expansion supports higher fab utilization, better fixed-cost absorption, and creates a pathway to sustained margin improvement as scale and higher-value mixes persist over multiple quarters.

Specialty foundry business model

SkyWater's emphasis on specialty, high-reliability process nodes and trusted domestic manufacturing creates sticky customer relationships and high switching costs. Serving regulated and long-lifecycle end markets (A&D, medical, automotive) tends to yield repeatable, lower-churn revenue and resilience versus commodity logic cycles.

Fab 25 acquisition driving scale

The successful integration of Fab 25 meaningfully expanded manufacturing capacity and contributed substantial wafer revenue in Q3. Added scale can enable higher throughput, attract larger program wins, and produce operating leverage over time if utilization remains elevated and integration synergies persist.

Negative Factors

Very high leverage

A debt-to-equity ratio near 8x materially elevates financial risk, increasing interest expense and reducing strategic flexibility. In a capital-intensive industry, such leverage can constrain investment, limit ability to absorb demand swings, and raise refinancing and covenant risks if cash generation falters.

Negative profitability metrics

Negative net and near-break-even EBIT margins show the company has not yet converted revenue growth into sustainable profits. Elevated operating expenses and integration costs can continue to compress margins unless gross-margin gains and scale benefits consistently outpace SG&A and R&D inflation.

Weak cash generation

Severely negative FCF growth and low OCF-to-net-income imply limited internal funding for capex, tool purchases, or working capital. Combined with risks like potential tools charges and volatile A&D program timing, cash constraints could force external financing or delay strategic investments, raising execution risk.

SkyWater Technology Business Overview & Revenue Model

Company Description

SkyWater Technology, Inc., together with its subsidiaries, provides semiconductor development and manufacturing services. The company offers engineering and process development support services to co-create technologies with customers; and semiconductor manufacturing services for various silicon-based analog and mixed-signal, power discrete, microelectromechanical systems, and rad-hard integrated circuits. It serves customers operating in the computation, aerospace and defense, automotive and transportation, bio-health, consumer, and industrial/internet of things industries. The company was incorporated in 2017 and is headquartered in Bloomington, Minnesota.

How the Company Makes Money

SkyWater Technology generates revenue primarily through its semiconductor manufacturing services, which include contract manufacturing agreements with various clients across different industries. The company operates under a foundry model, where it charges customers for the fabrication of their semiconductor designs. Key revenue streams include fees for wafer fabrication, engineering services, and product development support. Additionally, SkyWater has established significant partnerships with government entities and private companies that enhance its capabilities and market reach, contributing to its earnings. The focus on specialized manufacturing processes, including those for defense and high-reliability applications, allows the company to command premium pricing and secure long-term contracts, further bolstering its financial performance.

SkyWater Technology Financial Statement Overview

Summary

SkyWater Technology shows strong revenue growth but struggles with profitability and cash flow management. High debt levels increase financial risk, and while there is some improvement in gross profit margins, the company needs to enhance profitability and manage leverage for long-term stability.

Income Statement

SkyWater Technology shows a positive revenue growth trend with a 19.65% increase in the TTM period. However, the company struggles with profitability, as indicated by a negative net profit margin of -5.69% and a low EBIT margin of -1.08%. The gross profit margin has improved to 22.33%, suggesting better cost management. Overall, while revenue growth is strong, profitability remains a concern.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 7.77, indicating significant leverage and potential financial risk. Return on equity is positive at 1.44%, showing some profitability relative to equity. However, the high leverage could pose risks if not managed carefully, despite the positive equity ratio.

Cash Flow

Cash flow analysis shows challenges, with a negative free cash flow growth rate of -114.92% in the TTM period. The operating cash flow to net income ratio is 0.49, indicating limited cash generation relative to net income. The free cash flow to net income ratio is 0.64, suggesting some cash flow support, but overall cash flow management needs improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	346.59M	342.27M	286.68M	212.94M	162.85M	140.44M
Gross Profit	80.67M	69.63M	59.29M	25.97M	-7.47M	22.69M
EBITDA	137.04M	25.25M	14.14M	-2.68M	-23.28M	9.57M
Net Income	126.01M	-6.79M	-30.76M	-39.59M	-50.70M	-20.62M
Balance Sheet
Total Assets	787.03M	313.77M	316.76M	305.76M	263.60M	263.21M
Cash, Cash Equivalents and Short-Term Investments	30.89M	18.84M	18.38M	30.02M	12.92M	7.44M
Total Debt	209.49M	76.76M	72.86M	103.04M	61.84M	72.60M
Total Liabilities	587.28M	250.28M	256.06M	251.79M	203.67M	264.79M
Stockholders Equity	192.80M	57.61M	53.74M	53.67M	61.13M	-16.00K
Cash Flow
Free Cash Flow	-6.46M	7.20M	-408.00K	-31.75M	-87.66M	6.34M
Operating Cash Flow	5.83M	18.46M	10.08M	-14.30M	-55.68M	96.19M
Investing Cash Flow	-102.37M	-11.21M	-10.49M	-17.45M	-29.82M	-88.18M
Financing Cash Flow	106.75M	-6.79M	-11.23M	48.86M	90.98M	-5.19M

SkyWater Technology Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 27.31
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKYT, the sentiment is Positive. The current price of 27.31 is above the 20-day moving average (MA) of 19.76, above the 50-day MA of 18.12, and above the 200-day MA of 12.60, indicating a bullish trend. The MACD of 2.47 indicates Negative momentum. The RSI at 73.16 is Negative, neither overbought nor oversold. The STOCH value of 89.24 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SKYT.

SkyWater Technology Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IMOS	64 Neutral	$1.30B	172.89	0.98%	2.25%	0.96%	-85.27%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SKYT	60 Neutral	$1.32B	10.60	101.23%	―	0.19%	―
ICHR	54 Neutral	$775.36M	-18.93	-5.94%	―	16.86%	-26.89%
COHU	53 Neutral	$1.22B	-16.63	-8.53%	―	-4.50%	-45.79%
INDI	49 Neutral	$852.17M	-5.19	-34.90%	―	-4.99%	-12.11%
AOSL	48 Neutral	$660.15M	-6.78	-11.17%	―	5.81%	-376.55%