SkyWater Technology, Inc. (NASDAQ:SKYT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. SkyWater Technology, Inc., together with its subsidiaries, operates as a pure-play technology foundry that engages in the provision of semiconductor development, manufacturing, and packaging services in the United States. On 31 December 2023, the US$442m market-cap company posted a loss of US$31m for its most recent financial year. Many investors are wondering about the rate at which SkyWater Technology will turn a profit, with the big question being "when will the company breakeven?" Below we will provide a high-level summary of the industry analysts' expectations for the company.
According to the 4 industry analysts covering SkyWater Technology, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$10m in 2025. The company is therefore projected to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 134%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
NasdaqCM:SKYT Earnings Per Share Growth April 17th 2024
We're not going to go through company-specific developments for SkyWater Technology given that this is a high-level summary, however, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with SkyWater Technology is its relatively high level of debt. Typically, debt shouldn't exceed 40% of your equity, which in SkyWater Technology's case is 58%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are too many aspects of SkyWater Technology to cover in one brief article, but the key fundamentals for the company can all be found in one place – SkyWater Technology's company page on Simply Wall St. We've also put together a list of essential factors you should further research:
Valuation: What is SkyWater Technology worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether SkyWater Technology is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on SkyWater Technology's board and the CEO's background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
