SkyWater Technology (SKYT) AI Stock Analysis

• Market Cap: $737.09M
• Dividend Yield: N/A
• Average Volume (3M): 1.43M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.29
• Revenue Growth: -10.53%
• EPS Growth: 36.86%
• Country: US
• Employees: 702
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): -0.11
• Shares Outstanding: 48,175,816
• 10 Day Avg. Volume: 2,002,365
• 30 Day Avg. Volume: 1,432,746
• 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: 0.69
• Enterprise Value/Revenue: 1.75
• Enterprise Value/Gross Profit: 7.85
• Enterprise Value/Ebitda: 40.59
• 1Y Price Target: $14.60
• Price Target Upside: -19.25% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 58 Neutral
• Price Target: $16.00 ▼(-11.50% Downside)

SkyWater Technology's overall stock score reflects a mix of strong technical momentum and positive earnings call highlights, offset by significant financial challenges and valuation concerns. The company's high leverage and negative profitability weigh heavily on its financial performance score, while the recent acquisition and growth prospects in quantum computing provide a positive outlook.

Positive Factors

Transformative Acquisition

The acquisition of Infineon's Fab 25 is expected to double SkyWater's revenue scale and adjusted EBITDA, providing a significant boost to its market position and operational capacity.

Quantum Computing Expansion

SkyWater's focus on quantum computing positions it in a high-growth segment, enhancing its competitive edge and long-term revenue potential in advanced technology markets.

Advanced Packaging Progress

The progress in advanced packaging operations supports SkyWater's strategic growth in high-value segments, potentially increasing its market share and revenue diversification.

Negative Factors

High Leverage

High leverage poses financial risks, potentially limiting SkyWater's ability to invest in growth opportunities and increasing vulnerability to economic downturns.

Declining Revenue Growth

Declining revenue growth challenges SkyWater's ability to sustain its market position and may impact long-term profitability if not addressed.

Near-term Gross Margin Compression

Near-term gross margin compression due to the acquisition could impact profitability, requiring effective cost management to maintain financial health.

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. The company operates as a foundry, offering custom fabrication services for integrated circuits and other microelectronics. Its revenue streams include fabrication services, design services, and non-recurring engineering (NRE) fees associated with custom projects. SkyWater's business model involves partnering with customers to co-develop semiconductor solutions tailored to specific applications, which allows the company to secure long-term contracts and partnerships. Additionally, SkyWater benefits from collaborations with government entities and private sector clients who require secure and reliable semiconductor manufacturing capabilities. The company's strategic focus on niche markets and advanced technology nodes helps it differentiate from larger, commodity-driven semiconductor foundries, providing a competitive edge in the industry.

SkyWater Technology Financial Statement Overview

Summary

SkyWater Technology faces significant financial challenges, with declining revenue and profitability, high leverage, and mixed cash flow performance. While there are some operational improvements, the company needs to address its high debt levels and improve profitability to enhance its financial health.

Income Statement

SkyWater Technology's income statement reveals challenges in profitability, with negative net profit margins and declining revenue growth in the TTM period. The gross profit margin has improved over the years, indicating some operational efficiency. However, the negative EBIT and net income margins highlight ongoing profitability issues.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio, particularly in the TTM period, indicating significant leverage and potential financial risk. The negative return on equity suggests that the company is not generating sufficient returns on its equity base. The equity ratio is low, reflecting a higher reliance on debt financing.

Cash Flow

Cash flow analysis indicates a decrease in free cash flow growth in the TTM period, although the operating cash flow remains positive. The operating cash flow to net income ratio is below 1, suggesting that cash generation is not fully covering net losses. However, the free cash flow to net income ratio is relatively healthy, indicating some ability to generate cash relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	289.66M	342.27M	286.68M	212.94M	162.85M	140.44M
Gross Profit	64.69M	69.63M	59.29M	25.97M	-7.47M	22.69M
EBITDA	12.51M	25.25M	14.14M	-2.68M	-23.28M	9.57M
Net Income	-16.49M	-6.79M	-30.76M	-36.87M	-47.40M	-19.71M
Balance Sheet
Total Assets	581.96M	313.77M	316.76M	305.76M	263.60M	263.21M
Cash, Cash Equivalents and Short-Term Investments	56.37M	18.84M	18.38M	30.02M	12.92M	7.44M
Total Debt	351.46M	76.76M	72.86M	92.85M	59.45M	72.60M
Total Liabilities	351.46M	250.28M	256.06M	251.79M	203.67M	264.79M
Stockholders Equity	45.24M	57.61M	53.74M	53.67M	61.13M	-16.00K
Cash Flow
Free Cash Flow	43.28M	7.20M	-408.00K	-31.24M	-87.66M	6.34M
Operating Cash Flow	67.34M	18.46M	10.08M	-15.86M	-50.97M	96.19M
Investing Cash Flow	-26.76M	-11.21M	-10.49M	-15.38M	-34.54M	-88.18M
Financing Cash Flow	-9.57M	-6.79M	-11.23M	48.86M	90.98M	-5.19M

SkyWater Technology Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 18.08
• 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 18.08 is above the 20-day moving average (MA) of 12.44, above the 50-day MA of 11.58, and above the 200-day MA of 9.95, indicating a bullish trend. The MACD of 1.36 indicates Negative momentum. The RSI at 79.53 is Negative, neither overbought nor oversold. The STOCH value of 92.04 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	63 Neutral	684.06M	146.67	5.76%	4.36%	0.15%	-92.08%
SKYT	58 Neutral	$737.09M	―	-34.11%	―	-10.53%	36.86%
AOSL	56 Neutral	854.49M	-8.75	-11.79%	―	5.92%	-746.07%
COHU	55 Neutral	959.77M	-11.02	-10.49%	―	-21.27%	-207.30%
ICHR	50 Neutral	593.18M	-28.40	-2.98%	―	15.45%	49.82%
INDI	50 Neutral	869.02M	-4.83	-37.55%	―	-7.49%	-64.33%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%