One-glance verdict
Overvalued
$-0.77 our estimate vs market $32.46
Wall Street consensus: $35.00 (-4,624.3% lower than our fair-value estimate)
4296% below our estimate, beyond the bull case
Fundamentals snapshot
SkyWater Technology Inc
SKYT · NCM · Technology · Semiconductors
Current price
$32.46
52-week range
$9.54 - $39.93
Market cap
$1.60B
Balance sheet
Distressed
-0.19x Concerning
Net debt $240.76M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 29.2% last year.
- Reward Returns 102.8% on equity, ahead of 83% of its peers.
- Reward Free cash flow was positive in 1/10 years.
- Risk Net debt grew 211.1% over 3 years.
What this company does
SkyWater Technology Inc
SkyWater Technology is a specialized factory in the United States that builds custom computer chips for other companies. It earns money by manufacturing these chips for advanced industries like aerospace, defense, and healthcare. Because it's based in the U.S., the company plays a key role in the domestic supply chain (the network of companies involved in creating and distributing a product), helping ensure there is a local source for these critical components.
How the company got here
SkyWater was created in 2017 when a private equity firm bought a computer chip factory in Minnesota from a larger company called Cypress Semiconductor. Shortly after its founding, it earned a special designation as a "Trusted Foundry" from the U.S. Department of Defense, meaning it's a secure, American-owned partner for making sensitive military and government electronics. The company went public in 2021 to raise money for growth and later expanded significantly by buying another factory in Texas in 2025. This focus on specialized, secure chipmaking eventually led to an agreement in 2026 for SkyWater to be acquired by IonQ, a leading quantum computing company.
What it actually does
SkyWater is a special type of computer chip manufacturer known as a foundry, which means it builds chips that other companies design. Instead of mass-producing chips for things like smartphones, it focuses on creating specialized chips for industries like aerospace, defense, automotive, and bio-health. The company operates a unique business model it calls "Technology as a Service," where it partners with customers from the very beginning of an idea to help them design, develop, and then manufacture their custom chips. This approach allows innovators to bring new technologies to life without needing to own and operate their own expensive factories.
Legacy SkyWater
This is the company's original business, centered around its factory in Minnesota. It makes money in two main ways: Advanced Technology Services (ATS) and Wafer Services. Through ATS, customers pay SkyWater to help them research and develop new, cutting-edge chip designs, which generates engineering-focused revenue (money earned from providing expertise and development work). The Wafer Services part is the more traditional manufacturing business, where it gets paid to produce the final chips on silicon wafers (the round slices of material on which chips are built). This segment represents the company's foundation in deep technical collaboration.
SkyWater Texas
This is the company's newer and faster-growing division, based at the factory it bought in Austin, Texas, in 2025. The purchase of this facility significantly increased SkyWater's overall capacity (the total number of chips it can produce). This segment is primarily focused on higher-volume Wafer Services, meaning its main job is to manufacture chips in larger quantities for customers. It serves a mix of industrial, automotive, and defense clients and is considered the main engine for the company's recent revenue (the total money earned from sales) growth.
What management is betting on now
The company's core strategy is to be the go-to American partner for creating complex, specialized technologies, not just a simple manufacturer. A major focus is on securing its role as a trusted domestic supplier for government and defense projects, which require high security and a U.S.-based supply chain (the network of companies involved in creating and distributing a product). Management is also heavily investing in future technologies, especially quantum computing, by helping multiple quantum companies develop the unique chips they need. This strategic bet on the future of computing is highlighted by its planned acquisition by quantum leader IonQ.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $-0.77 vs current price $32.46
Wall Street consensus is the average analyst price target: $35.00 (-4,624.3% lower than our fair-value estimate).
Our most-likely fair value is $-0.77 a share — about 102.4% below today's price of $32.46, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Distressed
Net debt $240.8M. Interest coverage -0.2x.
Net debt
$240.76M
Interest coverage
-0.19x
SkyWater Technology Inc's profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
SKYT
BASELINE
SkyWater Technology Inc
Total debt $253.34M Interest coverage -0.19x This is the baseline the peer rows are being compared against.
Total debt $1.68B Interest coverage 15.94x This peer still has a real interest-payment cushion, while SKYT does not.
Total debt $141.70M Interest coverage 53.08x This peer still has a real interest-payment cushion, while SKYT does not.
Total debt $1.80B Interest coverage -1.82x Neither company has much profit cushion over interest right now.
Total debt $431.30M Interest coverage -9.10x Neither company has much profit cushion over interest right now.
Total debt $5.14M Interest coverage -598.10x Neither company has much profit cushion over interest right now.
What you should know
The case for and against SKYT
3 Rewards
1 Risk
Rewards
-
Revenue grew 29.2% last year.
-
Returns 102.8% on equity, ahead of 83% of its peers.
-
Free cash flow was positive in 1/10 years.
Risks
-
Net debt grew 211.1% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
13.87x
Forward P/E
-249.69x
P/B
8.82x
P/S
2.50x
EV/EBITDA
32.00x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
20.2%
Operating margin
1.2%
Net margin
18.4%
ROE
102.8%
ROA
0.3%
Health
Liquidity and balance-sheet strength
Debt / equity
1.36x
Current ratio
0.56x
Quick ratio
0.43x
Total debt
$253.34M
Total cash
$12.58M
Growth
How the business has been compounding
Revenue TTM
$638.84M
Revenue 5Y CAGR
27.6%
EPS TTM
2.34
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$-28.97M
Free CF TTM
$-56.17M
FCF margin
-8.8%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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