Automated LED Installations Will Transform Electrical Infrastructure

Key Takeaways

• Accelerated adoption driven by automation, regulatory mandates, and insurance endorsements could position SKYX as an industry standard, boosting recurring revenues and margin expansion.
  
• Diversified manufacturing, domestic automation, and a modular ecosystem strengthen supply chain resilience, supporting sustainable cost structure and high-quality earnings.
  
• Ongoing operating losses, uncertain regulatory outcomes, and industry commoditization pose sustained risks to revenue growth, margins, and SKYX's long-term profitability prospects.

Catalysts

Provides a series of safe-smart platform technologies in the United States.

• While analyst consensus expects tens of thousands of new home installations in 2025, current management commentary indicates actual penetration could far exceed these estimates as automation, full product assortment, and hotel channel rollout accelerate, potentially driving revenue growth at a steeper trajectory and supporting a re-rating of top-line expectations.
  
• Analysts broadly agree that regulatory safety standardization would serve as a catalyst, but recent leadership additions and expedited government engagement could result in an unexpectedly rapid mandate adoption, positioning SKYX as a de-facto industry standard well ahead of schedule and unlocking multi-year step-changes in addressable market size and gross margins.
  
• SKYX's multi-continent, flexible manufacturing-backed by recent U.S. automation initiatives-uniquely positions it to hedge against global supply chain shocks and tariff volatility, enabling both a resilient cost structure and operational scale that could drive sustainably higher net margins as the product mix tilts domestic.
  
• The shift towards LED-embedded and modular fixtures for recurring upgrades and replacements, combined with SKYX's broad plug-and-play product ecosystem, supports a growing base of recurring and subscription revenues that could structurally improve gross margins and earnings quality over time.
  
• As insurance companies increasingly recognize the risk-mitigating potential of SKYX's platform (in reducing fires and injuries), direct endorsement and integration into insurance requirements could drive step-function adoption across both retrofit and new-build markets, expanding long-term revenue streams across residential and commercial verticals.

SKYX Platforms Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on SKYX Platforms compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming SKYX Platforms's revenue will grow by 25.6% annually over the next 3 years.
• Even the bullish analysts are not forecasting that SKYX Platforms will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate SKYX Platforms's profit margin will increase from -40.7% to the average US Electrical industry of 10.2% in 3 years.
• If SKYX Platforms's profit margin were to converge on the industry average, you could expect earnings to reach $17.7 million (and earnings per share of $0.15) by about August 2028, up from $-35.6 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 44.6x on those 2028 earnings, up from -3.5x today. This future PE is greater than the current PE for the US Electrical industry at 31.7x.
• Analysts expect the number of shares outstanding to grow by 4.11% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 9.53%, as per the Simply Wall St company report.

SKYX Platforms Future Earnings Per Share Growth

Risks

• SKYX Platforms continues to generate operating and EBITDA losses despite sequential improvements, and the business is still reliant on external equity funding to sustain operations, suggesting ongoing pressure on earnings and a risk that future dilution or expensive capital could weigh on shareholder value.
  
• Secular headwinds such as rising interest rates and a potential slowdown in construction and new housing starts could dampen demand for the company's core lighting and smart home offerings, leading to lower revenue growth than anticipated.
  
• The company's heavy focus on achieving mandatory safety code standardization presents execution risk, as the timing and outcome are uncertain, and delays or failure to secure mandates may hinder widespread adoption, negatively impacting revenue and market penetration forecasts.
  
• Efforts to diversify manufacturing and automate domestic production, while important for long-term supply chain resilience, may not be cost-effective in the near term given tariff volatility and high up-front automation expenses, potentially compressing gross margins as SKYX invests in U.S. capacity.
  
• The market for lighting and smart home products continues to face commoditization and rapid technology evolution, which could erode SKYX's pricing power, increase the risk of technological obsolescence for its patented offerings, and ultimately limit net margins and profitability over time.

Valuation

• The assumed bullish price target for SKYX Platforms is $5.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of SKYX Platforms's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $5.0, and the most bearish reporting a price target of just $2.0.
  
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $173.3 million, earnings will come to $17.7 million, and it would be trading on a PE ratio of 44.6x, assuming you use a discount rate of 9.5%.
  
• Given the current share price of $1.16, the bullish analyst price target of $5.0 is 76.8% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.