We feel now is a pretty good time to analyze SkyWater Technology, Inc.’s (NASDAQ:SKYT) business, as it stands, the company may be on the cusp of a significant feat. SkyWater Technology, Inc., together with its subsidiaries, operates as a pure technology foundry engaged in the provision of semiconductor development and manufacturing services. With the latest financial year loss of 40 million USD and a last 12-month loss of 23 million USD, the company with a market capitalization of 258 million decreased. USD its loss by moving closer to the breakeven target. Many investors wonder about the speed at which SkyWater Technology will turn a profit, and the big question is “when will the company breakeven?” We’ve put together a brief overview of industry analysts’ expectations for the company, its breakeven year and its implied growth rate.
See our latest analysis for SkyWater Technology
According to the 5 industry analysts covering SkyWater Technology, the consensus is that break-even is close. They expect the company to suffer a final loss in 2024 before generating a positive profit of 19 million. USD in 2025. Therefore, the company is expected to break even around 2 years from now. How fast does the company need to grow each year to break even in 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow an average of 89% year-over-year, signaling high confidence from analysts. If this course turns out to be too aggressive, the company could become profitable much later than analysts predict.
We won’t go over company-specific developments for SkyWater Technology as this is a high-level overview, but keep in mind that a high expected growth rate is pretty much not unusual for a company currently going through an investment period.
One thing we’d like to highlight about SkyWater Technology is its debt ratio of 129%. Debt should typically not exceed 40% of your equity, and the company has significantly exceeded this. A higher level of debt requires tighter capital management, which increases the risk surrounding investment in the loss-making company.
This article is not intended to be a comprehensive analysis of SkyWater Technology, so if you are interested in understanding the company on a deeper level, take a look at SkyWater Technology’s company page on Simply Wall St. We have also compiled a list of important factors that you should investigate further:
Assessment: What is SkyWater Technology worth today? Is the future growth potential already factored into the price? The net asset value infographic in our free research report helps visualize whether SkyWater Technology is currently mispriced by the market.
Management team: An experienced management team at the helm adds to 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 offer 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 of a general nature. We only provide commentary based on historical data and analyst forecasts 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 shares and does not take into account your goals or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not take into account recent price-sensitive company announcements or qualitative material. Simply Wall St has no position in any listed stocks.