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SkyWater Stock is Trading at a Discount at 1.39X PS : Time to Buy?
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Key Takeaways
SKYT trades at a 1.39X forward P/S, far below the 8.76X industry average and key semiconductor peers.
ThermaView drove a 70% QoQ jump in Wafer Services revenues, now over half from new product offerings.
Fab 25 adds 400K wafer starts and $1B in contracts, enhancing SKYT's scale and U.S. foundry positioning.
SkyWater Technology (SKYT - Free Report) shares are currently cheap, as suggested by the Value Score of B. In terms of forward 12-month price/sales (P/S), SKYT is trading at 1.4X, which is significantly lower than the Zacks Electronics – Semiconductors industry’s 8.5X.
SKYT is undervalued compared with its industry peers, including Rambus (RMBS - Free Report) , Ambarella (AMBA - Free Report) and Lam Research (LRCX - Free Report) . In terms of the forward 12-month P/S, Rambus, Ambarella and Lam Research are trading at 9.32X, 7.62X and 6.83X, respectively.
SKYT's P/S F12M Ratio
Image Source: Zacks Investment Research
SkyWater stock is trading above the 50-day and 200-day moving averages, indicating a bullish trend.
SKYT Trades Above 50-day and 200-day SMAs
Image Source: Zacks Investment Research
Does the significant discount make SkyWater a buy? Let’s find out about the fundamental drivers.
ThermaView Adoption Positive for SKYT
SkyWater shares have rallied 11.9% in a month, outperforming the broader Zacks Computer and Technology sector’s return of 6% and the industry’s growth of 7.1%. The outperformance can be attributed to strong traction for SKYT’s newly launched ThermaView platform, which drove a 70% sequential increase in Wafer Services revenues to $7.5 million in first-quarter 2025. More than half of Wafer Services' revenues came from new products that include ThermaView as well as recent Advanced Technology Services (ATS) to Wafer Services conversions, a meaningful shift from 2024's 90% legacy mix.
SKYT Stock Performance
Image Source: Zacks Investment Research
ThermaView is a dedicated 90-nanometer CMOS and MEMS platform, focused on the rapidly growing advanced thermal imaging market. ThermaView’s strong debut signals long-term growth potential with applications spanning defense, industrial and medical sectors. As SkyWater positions itself to gain a rapid footprint within the projected $9 billion global thermal imaging market by 2027, the platform is expected to be a key driver of sustained expansion in Wafer Services.
For 2025, SKYT expects new products to drive Wafer Services' growth. Although ATS revenues suffered from continued budget delays and sluggish federal spending in the first quarter of 2025, the segment is expected to make a strong recovery in the second half of 2025 due to higher funding. SKYT expects Florida's advanced packaging platform development to further contribute to ATS revenues.
Fab 25 Acquisition to Boost SKYT’s Prospects
SkyWater completed the acquisition of Fab 25 on Monday (June 30), which marks a major step forward in expanding and securing the U.S.-based foundry model. The facility adds approximately 400,000 wafer starts annually to its purely U.S.-based foundry footprint and is expected to generate revenues and cash flow immediately supported by a four-year supply agreement valued at more than $1 billion.
The Fab 25 acquisition significantly enhances its ATS capabilities by incorporating its existing technology for foundational nodes such as embedded processors, MCUs, memory, mixed-signal, RF and power applications, bolstering scale and versatility. These technologies are critical to high-growth sectors including automotive (autonomous driving and EV power control), industrial automation and sensing, medical devices and defense systems.
The company is expected to benefit from the growing demand for quantum computing. In 2024, advanced computing was SKYT’s second-largest end market following aerospace and defense. More than 90% of SkyWater’s revenues from the advanced compute segment in 2024 were related to quantum technology development with key customers, including D-Wave and Si-Quantum. The company’s Technology as-a-Service model is gaining significant traction due to its ability to offer scalable production-ready solutions and support for superconducting photonic as well as other qubit technologies.
SkyWater Offers Positive Guidance for 2H25
SKYT maintained its 2025 revenue growth range of 5% for combined ATS and Wafer Services businesses (plus/minus 2%). The company believes it will achieve year-over-year growth in both ATS and Wafer Services in 2025, with the second half of 2025 driving results.
The Zacks Consensus Estimate for 2025 revenues is currently pegged at $307.15 million, indicating a 10.26% decline from2024’s reported figure.
For second-quarter 2025, SkyWater expects total revenues in the range of $55-$60 million, with ATS revenues in the $49-$53 million range and tools revenues just under $1 million. Wafer Services revenues are expected to be between $5 million and $6 million.
The consensus mark for second-quarter 2025 revenues is currently pegged at $57.3 million, indicating a 38.6% decline from the year-ago quarter’s reported figure.
SkyWater still expects to achieve non-GAAP earnings per share in 2025. The Zacks Consensus Estimate for SkyWater’s 2025 loss is currently pegged at one cent per share, which has narrowed significantly from seven cents over the past 60 days. The company reported earnings of six cents per share in 2024.
SkyWater stock looks attractive due to the strong adoption of its proprietary ThermaView platform, which is gaining traction across the defense and industrial markets. The Fab 25 acquisition significantly expands U.S.-based foundry capacity, supporting national onshoring efforts. The growing footprint in quantum computing is noteworthy.
SkyWater currently sports a Zacks Rank #1 (Strong Buy) and has a Growth Score of A, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank stocks here.
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SkyWater Stock is Trading at a Discount at 1.39X PS : Time to Buy?
Key Takeaways
SkyWater Technology (SKYT - Free Report) shares are currently cheap, as suggested by the Value Score of B. In terms of forward 12-month price/sales (P/S), SKYT is trading at 1.4X, which is significantly lower than the Zacks Electronics – Semiconductors industry’s 8.5X.
SKYT is undervalued compared with its industry peers, including Rambus (RMBS - Free Report) , Ambarella (AMBA - Free Report) and Lam Research (LRCX - Free Report) . In terms of the forward 12-month P/S, Rambus, Ambarella and Lam Research are trading at 9.32X, 7.62X and 6.83X, respectively.
SKYT's P/S F12M Ratio
Image Source: Zacks Investment Research
SkyWater stock is trading above the 50-day and 200-day moving averages, indicating a bullish trend.
SKYT Trades Above 50-day and 200-day SMAs
Image Source: Zacks Investment Research
Does the significant discount make SkyWater a buy? Let’s find out about the fundamental drivers.
ThermaView Adoption Positive for SKYT
SkyWater shares have rallied 11.9% in a month, outperforming the broader Zacks Computer and Technology sector’s return of 6% and the industry’s growth of 7.1%. The outperformance can be attributed to strong traction for SKYT’s newly launched ThermaView platform, which drove a 70% sequential increase in Wafer Services revenues to $7.5 million in first-quarter 2025. More than half of Wafer Services' revenues came from new products that include ThermaView as well as recent Advanced Technology Services (ATS) to Wafer Services conversions, a meaningful shift from 2024's 90% legacy mix.
SKYT Stock Performance
Image Source: Zacks Investment Research
ThermaView is a dedicated 90-nanometer CMOS and MEMS platform, focused on the rapidly growing advanced thermal imaging market. ThermaView’s strong debut signals long-term growth potential with applications spanning defense, industrial and medical sectors. As SkyWater positions itself to gain a rapid footprint within the projected $9 billion global thermal imaging market by 2027, the platform is expected to be a key driver of sustained expansion in Wafer Services.
For 2025, SKYT expects new products to drive Wafer Services' growth. Although ATS revenues suffered from continued budget delays and sluggish federal spending in the first quarter of 2025, the segment is expected to make a strong recovery in the second half of 2025 due to higher funding. SKYT expects Florida's advanced packaging platform development to further contribute to ATS revenues.
Fab 25 Acquisition to Boost SKYT’s Prospects
SkyWater completed the acquisition of Fab 25 on Monday (June 30), which marks a major step forward in expanding and securing the U.S.-based foundry model. The facility adds approximately 400,000 wafer starts annually to its purely U.S.-based foundry footprint and is expected to generate revenues and cash flow immediately supported by a four-year supply agreement valued at more than $1 billion.
The Fab 25 acquisition significantly enhances its ATS capabilities by incorporating its existing technology for foundational nodes such as embedded processors, MCUs, memory, mixed-signal, RF and power applications, bolstering scale and versatility. These technologies are critical to high-growth sectors including automotive (autonomous driving and EV power control), industrial automation and sensing, medical devices and defense systems.
The company is expected to benefit from the growing demand for quantum computing. In 2024, advanced computing was SKYT’s second-largest end market following aerospace and defense. More than 90% of SkyWater’s revenues from the advanced compute segment in 2024 were related to quantum technology development with key customers, including D-Wave and Si-Quantum. The company’s Technology as-a-Service model is gaining significant traction due to its ability to offer scalable production-ready solutions and support for superconducting photonic as well as other qubit technologies.
SkyWater Offers Positive Guidance for 2H25
SKYT maintained its 2025 revenue growth range of 5% for combined ATS and Wafer Services businesses (plus/minus 2%). The company believes it will achieve year-over-year growth in both ATS and Wafer Services in 2025, with the second half of 2025 driving results.
The Zacks Consensus Estimate for 2025 revenues is currently pegged at $307.15 million, indicating a 10.26% decline from2024’s reported figure.
For second-quarter 2025, SkyWater expects total revenues in the range of $55-$60 million, with ATS revenues in the $49-$53 million range and tools revenues just under $1 million. Wafer Services revenues are expected to be between $5 million and $6 million.
The consensus mark for second-quarter 2025 revenues is currently pegged at $57.3 million, indicating a 38.6% decline from the year-ago quarter’s reported figure.
SkyWater still expects to achieve non-GAAP earnings per share in 2025. The Zacks Consensus Estimate for SkyWater’s 2025 loss is currently pegged at one cent per share, which has narrowed significantly from seven cents over the past 60 days. The company reported earnings of six cents per share in 2024.
SkyWater Technology, Inc. Price and Consensus
SkyWater Technology, Inc. price-consensus-chart | SkyWater Technology, Inc. Quote
Here’s Why SkyWater Stock is a Strong Buy
SkyWater stock looks attractive due to the strong adoption of its proprietary ThermaView platform, which is gaining traction across the defense and industrial markets. The Fab 25 acquisition significantly expands U.S.-based foundry capacity, supporting national onshoring efforts. The growing footprint in quantum computing is noteworthy.
SkyWater currently sports a Zacks Rank #1 (Strong Buy) and has a Growth Score of A, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank stocks here.