SkyWater Technology (SKYT) AI Stock Analysis

• Market Cap: $1.43B
• Dividend Yield: N/A
• Average Volume (3M): 2.42M
• Price to Earnings (P/E): 12.1
• Beta (1Y): 2.26
• Revenue Growth: 0.19%
• EPS Growth: N/A
• Country: US
• Employees: 702
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): -0.03
• Shares Outstanding: 48,625,690
• 10 Day Avg. Volume: 805,544
• 30 Day Avg. Volume: 2,417,258
• PEG Ratio: >-0.01
• Price to Book (P/B): 4.73
• Price to Sales (P/S): 2.01
• P/FCF Ratio: -16.70
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 3.20
• Enterprise Value/Gross Profit: 16.02
• Enterprise Value/Ebitda: 9.81
• 1Y Price Target: $35.00
• Price Target Upside: 18.81% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): -0.3
• Revenue Forecast (FY): $609.12M

• Rating: 68 Neutral
• Price Target: $34.00 ▲(15.41% Upside)
• Action: Downgraded Date: 02/27/26
• Date: Action: Downgraded 02/27/26

The score is driven primarily by improving fundamentals (notably the strengthened 2025 balance sheet and revenue growth) but held back by volatile cash generation and inconsistent core operating profitability. Technicals are supportive with an established uptrend, while valuation is moderately favorable on P/E but lacks dividend support. The earnings call and the IonQ acquisition announcement add positive momentum, tempered by execution and cost risks highlighted by management and deal-closing conditions.

Positive Factors

Balance Sheet Improvement

SkyWater's 2025 deleveraging materially boosts financial flexibility and reduces refinancing risk. A stronger balance sheet enables sustained investment in fabs, tooling and R&D, supports longer qualification cycles for specialty customers, and provides a multi‑month buffer against semiconductor cyclicality.

Sustained Revenue & Margin Trend

Consistent multi‑year revenue expansion and materially improved gross margins reflect growing demand for SkyWater's specialty foundry services. Stable ~20% gross margins and repeat long‑lifecycle production create predictable revenue streams and underpin durable operating leverage as volumes and higher‑value process mix scale.

Strategic M&A / Fab Integration

The IonQ transaction and prior Fab 25 integration create a vertically integrated quantum and specialty-manufacturing offering. This structural move secures a domestic trusted supply chain, accelerates quantum product roadmaps, and expands addressable programs with government and enterprise customers over the medium term.

Negative Factors

Volatile Cash Generation

Operating cash flow volatility—positive in 2024 but negative in 2025—signals unstable cash conversion and higher cash burn. This raises financing dependency for capex and tooling, constrains organic reinvestment, and makes near‑term execution sensitive to funding availability despite improved balance‑sheet metrics.

Inconsistent Operating Profitability

SkyWater's swings between positive and negative operating results indicate that core margins are still sensitive to mix, utilization and one‑offs. Reliance on non‑operating gains to lift annual net margins undermines earnings quality and means sustainable operating profit must be demonstrated to lock in returns on the stronger balance sheet.

A&D Exposure & Cost Risks

Exposure to aerospace & defense budget dynamics and potential government shutdowns creates near‑term demand risk for ATS work. Coupled with higher post‑acquisition operating expenses and a possible tools charge, these factors can pressure margins and execution, making profitability and cash profiles harder to predict.

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 multi-year revenue growth and improved gross margin support the business trend, and the 2025 balance sheet deleveraging is a major positive. Offsetting this, operating profitability has been inconsistent and 2025 earnings quality looks weaker with negative operating cash flow and significantly negative free cash flow.

Income Statement

Revenue growth has been strong over multiple years (notably 2023–2025), indicating improving demand and scale. Gross margin has also improved materially versus 2021 and has held around ~20% in recent years, supporting better underlying profitability. However, operating profitability remains inconsistent (EBIT/EBITDA swing between positive and negative), and the 2025 annual net margin appears unusually high relative to operating results—suggesting earnings were likely helped by non-operating or one-time items rather than core operations.

Balance Sheet

Leverage improved dramatically in 2025, with debt dropping to very low levels and equity rising substantially, which meaningfully strengthens financial flexibility and reduces refinancing risk. Earlier years (2021–2024) showed much higher leverage (debt exceeding equity), so the recent step-change is a key positive. The main watch-out is that returns on equity have been volatile and were negative in prior years, highlighting that balance-sheet improvement still needs to be matched by steadier operating performance.

Cash Flow

Cash generation is uneven. 2024 showed positive operating cash flow and positive free cash flow, but 2025 reverted to negative operating cash flow and significantly negative free cash flow, implying higher cash burn and/or heavier investment needs. With net income in 2025 not translating into operating cash flow, earnings quality looks weaker in the most recent year, and cash-flow stability remains a risk.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	442.14M	342.27M	286.68M	212.94M	162.85M
Gross Profit	88.33M	69.63M	59.29M	25.97M	-7.47M
EBITDA	34.50M	25.25M	14.14M	-2.68M	-23.28M
Net Income	118.92M	-6.79M	-30.76M	-39.59M	-50.70M
Balance Sheet
Total Assets	733.78M	313.77M	316.76M	305.76M	263.60M
Cash, Cash Equivalents and Short-Term Investments	23.22M	18.84M	18.38M	30.02M	12.92M
Total Debt	5.84M	76.76M	72.86M	103.04M	61.84M
Total Liabilities	537.96M	250.28M	256.06M	251.79M	203.67M
Stockholders Equity	187.82M	57.61M	53.74M	53.67M	61.13M
Cash Flow
Free Cash Flow	-53.20M	7.20M	-408.00K	-31.75M	-87.66M
Operating Cash Flow	-24.15M	18.46M	10.08M	-14.30M	-55.68M
Investing Cash Flow	-118.00M	-11.21M	-10.49M	-17.45M	-29.82M
Financing Cash Flow	146.52M	-6.79M	-11.23M	48.86M	90.98M

SkyWater Technology Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 29.46
• 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 29.46 is below the 20-day moving average (MA) of 29.51, above the 50-day MA of 27.24, and above the 200-day MA of 16.61, indicating a neutral trend. The MACD of 0.18 indicates Positive momentum. The RSI at 51.98 is Neutral, neither overbought nor oversold. The STOCH value of 63.09 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	68 Neutral	$1.43B	12.11	96.90%	―	0.19%	―
ICHR	62 Neutral	$1.65B	-30.90	-7.75%	―	16.86%	-26.89%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
IMOS	60 Neutral	$1.60B	100.45	0.98%	2.25%	0.96%	-85.27%
COHU	55 Neutral	$1.42B	-18.99	-9.04%	―	-4.50%	-45.79%
AOSL	50 Neutral	$625.27M	-6.08	-12.00%	―	5.81%	-376.55%
INDI	46 Neutral	$803.85M	-5.01	-37.17%	―	-4.99%	-12.11%

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.