Yahoo Finance Market Sentiment Around Loss-Making SkyWater Technology, Inc. (NASDAQ:SKYT)
With the business potentially at an important milestone, we thought we'd take a closer look at SkyWater Technology, Inc.'s (NASDAQ:SKYT) future prospects. 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$397m 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?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for SkyWater Technology
SkyWater Technology is bordering on breakeven, according to the 4 American Semiconductor analysts. They expect the company to post a final loss in 2024, before turning a profit of US$10m in 2025. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 134% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of SkyWater Technology's upcoming projects, however, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with SkyWater Technology is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in SkyWater Technology's case is 58%. A higher level of debt requires more stringent capital management which increases the risk around 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 important 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.
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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.
