SkyWater Technology (SKYT) AI Stock Analysis

• Market Cap: $1.54B
• Dividend Yield: N/A
• Average Volume (3M): 2.84M
• Price to Earnings (P/E): 12.3
• Beta (1Y): 2.27
• 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: 48,625,690
• 10 Day Avg. Volume: 4,205,112
• 30 Day Avg. Volume: 2,839,203
• 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: 1.12
• Enterprise Value/Revenue: 4.96
• Enterprise Value/Gross Profit: 21.32
• Enterprise Value/Ebitda: 12.55
• 1Y Price Target: $32.50
• Price Target Upside: 2.65% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: $36.00 ▲(13.71% Upside)

Strong technical uptrend and positive catalysts (IonQ acquisition agreement and a strong earnings beat with supportive guidance) lift the score. Offsetting this, financial fundamentals remain mixed due to weak profitability, pressured cash flow trends, and high leverage, which keep overall risk elevated despite a moderate P/E.

Positive Factors

Specialty domestic foundry

SkyWater’s focus on specialty, high-reliability processes and domestic manufacturing creates a durable competitive niche away from leading-edge logic. This supports long product lifecycles, higher switching costs for customers, and stronger positioning for government/defense programs over many quarters.

Sustained revenue growth and margin improvement

Consistent ~20% TTM revenue growth combined with rising gross margins reflects expanding demand and improved operational efficiency. Over 2–6 months this trend supports better unit economics and the potential to translate volume and mix gains into durable margin expansion if specialty mix and Fab utilization remain high.

Strategic acquisition enables vertical integration

The IonQ merger is a structural change that integrates SkyWater’s domestic manufacturing into a full‑stack quantum strategy. That verticality can secure long-term, predictable demand for SkyWater’s fabs, enhance government/defense positioning, and create multi-year revenue visibility tied to quantum roadmaps.

Negative Factors

High leverage

A debt-to-equity ratio near 8x materially reduces financial flexibility and raises refinancing and interest-rate sensitivity risk. Over months this limits the company’s ability to fund capex, absorb cyclical downturns, or invest in process development without relying on external financing or dilutive transactions.

Weak profitability

Despite revenue growth, persistent negative net and near‑breakeven EBIT margins indicate the business is not consistently converting sales into sustainable profits. Over several quarters this undermines retained earnings, constrains reinvestment capacity, and increases reliance on cost control or structural margin improvements to reach durable profitability.

Poor cash generation

A dramatic decline in free cash flow and weak operating cash conversion show the company struggles to turn accounting profits into cash. Over a multi-month horizon this pressures liquidity, heightens refinancing risk given high leverage, and can restrict funding for maintenance capex and R&D essential for foundry competitiveness.

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

Strong TTM revenue growth (+19.65%) and improving gross margin (22.33%) are positives, but profitability remains weak (net margin -5.69%, EBIT margin -1.08%). Leverage is high (debt-to-equity 7.77) and cash flow trends are concerning (free cash flow growth -114.92%, operating cash flow to net income 0.49), increasing financial risk.

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	211.57M	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	192.81M	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: 31.66
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 31.66 is above the 20-day moving average (MA) of 30.65, above the 50-day MA of 22.40, and above the 200-day MA of 14.50, indicating a bullish trend. The MACD of 3.18 indicates Positive momentum. The RSI at 61.31 is Neutral, neither overbought nor oversold. The STOCH value of 45.66 is Neutral, 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
SKYT	70 Outperform	$1.54B	12.28	101.23%	―	0.19%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
IMOS	60 Neutral	$1.34B	175.39	0.98%	2.25%	0.96%	-85.27%
COHU	53 Neutral	$1.33B	-18.21	-8.53%	―	-4.50%	-45.79%
ICHR	52 Neutral	$1.04B	-25.47	-5.94%	―	16.86%	-26.89%
INDI	49 Neutral	$900.49M	-5.48	-34.90%	―	-4.99%	-12.11%
AOSL	48 Neutral	$664.36M	-6.82	-11.17%	―	5.81%	-376.55%

SkyWater Technology Corporate Events

SkyWater Technology to Be Acquired by IonQ in Merger

On January 25, 2026, SkyWater Technology, Inc. entered into a merger agreement with quantum computing company IonQ, Inc. under which SkyWater will be acquired in a two-step merger and become an indirect, wholly owned subsidiary of IonQ. Under the terms, each outstanding SkyWater common share (other than excluded shares and appraisal shares) will be converted at closing into the right to receive $15 in cash plus a number of IonQ shares determined by a formula tied to IonQ’s 20-day volume-weighted average price, subject to a collar that sets the exchange ratio between 0.3326 and 0.5265 IonQ shares. SkyWater’s equity awards will be rolled into IonQ equity (with board RSUs vesting and settling before closing), and the SkyWater board has unanimously approved the deal, deemed it fair and in the best interests of shareholders, and agreed to recommend it, while securing voting commitments from stockholders representing about 19.9% of the company’s voting power. Closing is contingent on shareholder approval, antitrust clearance under the Hart-Scott-Rodino Act, absence of legal injunctions, and the non-occurrence of material adverse effects, but is not subject to a financing condition; upon completion, SkyWater’s shares will be delisted from Nasdaq and deregistered. The agreement includes standard deal protections and fiduciary-out provisions, a $51.6 million termination fee payable by SkyWater under specified circumstances involving superior proposals or failed shareholder approval following an acquisition approach, and an obligation by IonQ to make a post-termination equity investment by purchasing 2,857,143 newly issued SkyWater shares if the deal collapses due to timing out or antitrust blocks, in which case IonQ will also be subject to standstill restrictions for up to two years, providing SkyWater with capital and partial downside protection if regulatory or timing hurdles derail the transaction.

The most recent analyst rating on (SKYT) stock is a Buy with a $35.00 price target. To see the full list of analyst forecasts on SkyWater Technology stock, see the SKYT Stock Forecast page.

SkyWater Technology to Be Acquired by IonQ

On January 25, 2026, SkyWater Technology entered into a definitive agreement to be acquired by quantum computing company IonQ in a cash-and-stock transaction valued at approximately $1.8 billion, offering SkyWater shareholders $35.00 per share, a 38% premium to the 30-day volume-weighted average price as of January 23, 2026. The deal, unanimously approved by both boards and expected to close in the second or third quarter of 2026 pending shareholder and regulatory approvals, will create what the companies describe as the first vertically integrated full‑stack quantum platform, combining IonQ’s quantum computing, networking, security and sensing technologies with SkyWater’s onshore R&D and manufacturing capabilities. The combined entity aims to accelerate IonQ’s roadmap toward fault-tolerant quantum computing, bring forward functional testing of 200,000-qubit processors to 2028, strengthen its positioning as a trusted U.S. government and defense partner with an end-to-end domestic supply chain, and maintain SkyWater as a pure-play foundry and quantum merchant supplier while giving its shareholders a 4.4%–6.7% stake in the merged company.

The most recent analyst rating on (SKYT) stock is a Buy with a $35.00 price target. To see the full list of analyst forecasts on SkyWater Technology stock, see the SKYT Stock Forecast page.