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SkyWater Technology (SKYT)
NASDAQ:SKYT
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SkyWater Technology
(NASDAQ:SKYT)
Rating:55Neutral
Price Target:
$9.00
▼(-0.33%Downside)
Positive Factors
Profitability Outlook
The company's CY25 outlook projects a return to profitability driven by growth in Advanced Technology Services and Wafer Services.
Revenue Growth
SkyWater's wafer services revenue increased significantly, driven by growth in the ThermaView platform and customer transitions, with new products expected to represent a larger share of future revenue.
Strategic Acquisition
SkyWater Technology's acquisition of Fab 25 from Infineon adds capacity and mitigates the risk of having just one front-end fab.
Negative Factors
Budget Delays
Federal budget negotiations have delayed R&D program funding, deferring the anticipated 2Q25 recovery in ATS to C2H25.
Contract Uncertainties
Government budget finalizations have been slow, affecting the expected rebound in ATS sales and creating limited visibility for future contracts.
Market Weakness
Wafer Services sales experienced a significant decrease due to prolonged weakness in the automotive and industrial markets.
SkyWater Technology (SKYT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$436.66M
Dividend YieldN/A
Average Volume (3M)733.54K
Price to Earnings (P/E)―
Beta (1Y)2.04
Revenue Growth7.90%
EPS Growth74.69%
CountryUS
Employees702
SectorTechnology
Sector Strength83
IndustrySemiconductors
Share Statistics
EPS (TTM)-0.08
Shares Outstanding48,037,025
10 Day Avg. Volume691,614
30 Day Avg. Volume733,544
Financial Highlights & Ratios
PEG Ratio-0.98
Price to Book (P/B)6.97
Price to Sales (P/S)0.00
P/FCF Ratio13.55
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$11.75Price Target Upside30.12% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
SkyWater Technology Business Overview & Revenue Model
Company DescriptionSkyWater 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 MoneySkyWater Technology generates revenue primarily through its semiconductor manufacturing services. The company operates a pure-play foundry model, offering fabrication services for custom ICs and MEMS, which allows clients to leverage SkyWater’s advanced manufacturing capabilities without owning their production facilities. Key revenue streams include wafer fabrication, engineering services, and technology licensing. SkyWater partners with various organizations, including government agencies and commercial entities, to deliver specialized solutions tailored to specific applications. The company also benefits from strategic collaborations and government contracts, which contribute significantly to its earnings by enhancing its technological capabilities and expanding its service offerings.
SkyWater Technology Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 24.55%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view, with significant achievements such as surpassing financial guidance, successful platform launches, and strategic acquisitions. However, these are tempered by challenges due to government budget delays and tariff uncertainties. While long-term prospects remain strong, short-term challenges are notable.Q1-2025 Updates
Positive Updates
Exceeded Guidance in Key Financial Metrics
Revenues for Q1 were closely aligned with the outlook and just above the midpoint of the guidance range. Gross margin and non-GAAP EPS exceeded guidance, with adjusted EBITDA over $4 million.
Successful Launch of ThermaView Platform
The ThermaView platform, focused on advanced thermal imaging, drove over half of Q1's Wafer Services revenue, marking a significant strategic milestone for the company.
Strategic Acquisition of Fab 25
SkyWater is expanding its 200-millimeter foundry capacity in the U.S. through the acquisition of Infineon's Fab 25, expected to provide immediate revenue and positive cash flow.
Quantum Computing Advancements
Significant progress in quantum computing with partner D-Wave's announcement of quantum supremacy, positioning SkyWater as a key player in the quantum technology landscape.
Positive Cash Flow and Strong Financial Position
Ended the quarter with $51 million in cash, an increase of $32 million from year-end, with customer-funded capital expenditures and debt reduction.
Negative Updates
Challenges in ATS Revenue
ATS revenue was softer than expected due to continued budget delays and extended negotiations in Washington, D.C., affecting near-term revenue outlook.
Impact of Tariff Uncertainty
Uncertainty regarding tariff policies poses potential macroeconomic risks, although SkyWater's overall tariff exposure is relatively limited.
Delayed Government Funding
Prolonged U.S. federal budget negotiations have delayed the timing of key program funding for ATS customers, impacting expected revenue recovery.
Company Guidance
During SkyWater Technology's Q1 2025 earnings call, the company provided guidance that its fiscal year outlook remains largely unchanged, with a forecasted 5% revenue growth plus or minus 2% for its combined ATS and Wafer Services business. Q1 revenue came in at $61.3 million, slightly above the midpoint of guidance, with gross margin at 24.2% and adjusted EBITDA surpassing forecasts at over $4 million. The company anticipates Q2 revenues between $55 million and $60 million, with ATS revenues projected at $49 million to $53 million and Wafer Services at $5 million to $6 million. SkyWater expects a strong second half of 2025, driven by increased funding for ATS programs and the ongoing ramp of its advanced packaging business, aiming for positive non-GAAP EPS and adjusted EBITDA of at least 10% of total revenues for the year. The acquisition of Infineon's Fab 25 is expected to close mid-year, providing immediate revenue and positive cash flow, further diversifying SkyWater's business.SkyWater Technology Financial Statement Overview
Summary
SkyWater Technology exhibits significant revenue growth and improved operational efficiency, but profitability remains elusive with negative net margins and ROE. Cash flow improvements and a stronger balance sheet show progress towards financial stability despite ongoing challenges in achieving positive net income.Income Statement
SkyWater Technology has shown a significant revenue growth from $162.8M in 2022 to $342.3M in 2024, indicating strong market demand. The gross profit margin improved to 20.34% from negative figures in prior years, highlighting enhanced operational efficiency. However, the net profit margin is negative at -1.98%, showing continued challenges in achieving profitability. The EBIT and EBITDA margins have improved, but are still modest at 1.92%.68
Positive
Balance Sheet
The debt-to-equity ratio reduced significantly, indicating improved financial structure and reduced leverage risk. The equity ratio is 18.37%, showing a moderate equity base. However, the return on equity remains negative due to negative net income, suggesting the company is not yet generating returns for shareholders.55
Neutral
Cash Flow
Operating cash flow has improved substantially, reaching $15.2M in 2024, a positive sign for liquidity. Free cash flow turned positive, showing effective capital expenditure management. The operating cash flow to net income ratio is robust, indicating efficient cash conversion despite negative net income.72
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Mar 2023 | Mar 2022 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 345.94M | 342.27M | 286.68M | 212.94M | 162.85M | 140.44M | Gross Profit |
| 63.02M | 69.63M | 59.29M | 25.97M | -7.47M | 22.69M | EBIT |
| -124.00K | 6.56M | -14.79M | -29.77M | -57.10M | -8.64M | EBITDA |
| 14.36M | 6.56M | 14.14M | -2.68M | -23.28M | 9.57M | Net Income Common Stockholders |
| -16.44M | -6.79M | -30.76M | -36.87M | -47.40M | -19.71M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 20.00M | 18.84M | 18.38M | 30.02M | 12.92M | 7.44M | Total Assets |
| 312.28M | 313.77M | 316.76M | 305.76M | 263.60M | 263.21M | Total Debt |
| 81.80M | 5.07M | 72.86M | 92.85M | 59.45M | 72.60M | Net Debt |
| 61.80M | -13.77M | 54.48M | 62.83M | 46.53M | 65.16M | Total Liabilities |
| 252.88M | 95.96M | 256.06M | 251.79M | 203.67M | 264.79M | Stockholders Equity |
| 51.34M | 57.61M | 53.74M | 53.67M | 61.13M | -16.00K |
| Cash Flow | Free Cash Flow | ||||
| 29.62M | 29.00K | -408.00K | -31.24M | -87.66M | 6.34M | Operating Cash Flow |
| 51.48M | 15.24M | 10.08M | -15.86M | -50.97M | 96.19M | Investing Cash Flow |
| -21.72M | -18.48M | -10.49M | -15.38M | -34.54M | -88.18M | Financing Cash Flow |
| -26.34M | 3.70M | -11.23M | 48.86M | 90.98M | -5.19M |
SkyWater Technology Technical Analysis
Positive
9.03
Price Trends
7.69
Positive
8.57
Positive
9.25
Negative
Market Momentum
0.39
Positive
57.76
Neutral
42.92
Neutral
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 9.03 is above the 20-day moving average (MA) of 8.79, above the 50-day MA of 7.69, and below the 200-day MA of 9.25, indicating a neutral trend. The MACD of 0.39 indicates Positive momentum. The RSI at 57.76 is Neutral, neither overbought nor oversold. The STOCH value of 42.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SKYT.
SkyWater Technology Risk Analysis
SkyWater Technology disclosed 55 risk factors in its most recent earnings report. SkyWater Technology reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
We may not realize the anticipated benefits of the Transaction and any benefit may take longer to realize than we expect. Q4, 2024
2.
Increased leverage may harm our financial condition and results of operations. Q4, 2024
3.
We may use artificial intelligence in our business and operations, and challenges with properly managing its use could harm our business and expose us to costly liability. Q4, 2024
SkyWater Technology Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $345.33M | 22.93 | 23.57% | 5.60% | -13.18% | -12.06% | |
62 Neutral | $11.72B | 10.43 | -7.10% | 2.91% | 7.41% | -7.94% | |
61 Neutral | $881.01M | ― | -24.12% | ― | 2.66% | -11.35% | |
60 Neutral | $1.30B | ― | -26.43% | ― | -16.95% | -2.47% | |
55 Neutral | $436.66M | ― | -16.06% | ― | 7.90% | 74.69% | |
52 Neutral | $620.54M | ― | -32.43% | ― | -7.09% | -53.23% | |
42 Neutral | $231.88M | ― | -180.49% | ― | -9.62% | -30.36% |
* Technology Sector Average
Performance Comparison
SKYT
SkyWater Technology
9.03
1.26
16.22%
WOLF
Wolfspeed
1.39
-26.77
-95.06%
NVEC
NVE
72.44
-0.31
-0.43%
LASR
nLIGHT
17.60
5.54
45.94%
INDI
indie Semiconductor
2.87
-4.55
-61.32%
NVTS
Navitas Semiconductor
6.18
1.63
35.82%
SkyWater Technology Corporate Events
Executive/Board ChangesShareholder Meetings
SkyWater Technology Elects Directors at Annual Meeting
Neutral
May 22, 2025
SkyWater Technology, Inc. held its annual meeting of stockholders on May 21, 2025, where stockholders elected nine directors to serve until the 2026 annual meeting. Additionally, the appointment of KPMG LLP as the independent registered public accounting firm for fiscal 2025 was ratified. These decisions are expected to impact the company’s governance and financial oversight, potentially influencing its strategic direction and stakeholder confidence.
The most recent analyst rating on (SKYT) stock is a Buy with a $12.00 price target. To see the full list of analyst forecasts on SkyWater Technology stock, see the SKYT Stock Forecast page.
Executive/Board Changes
SkyWater Technology Appoints New Board Members
Neutral
Apr 1, 2025
On March 30, 2025, SkyWater Technology, Inc. announced the election of Timothy E. Baxter, Andrew D. C. LaFrence, and Tammy J. Miller to its Board of Directors, effective March 31, 2025. These appointments are set to last until the company’s 2025 Annual Meeting of Stockholders. The new directors are deemed independent under Nasdaq rules and have been appointed to the Audit Committee, with Ms. Miller also joining the Compensation Committee. Their compensation aligns with the company’s Non-Employee Director Compensation Policy and will be pro-rated based on their service duration. The appointments are not influenced by any arrangements or transactions requiring disclosure.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.