SkyWater Technology, Inc. (NASDAQ:SKYT) Analysts Are Pretty Bullish On The Stock After Recent Results

Shareholders might have noticed that SkyWater Technology, Inc. (NASDAQ:SKYT) filed its yearly result this time last week. The early response was not positive, with shares down 3.6% to US$9.33 in the past week. It looks like the results were pretty good overall. While revenues of US$342m were in line with analyst predictions, statutory losses were much smaller than expected, with SkyWater Technology losing US$0.14 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for SkyWater Technology

After the latest results, the consensus from SkyWater Technology's five analysts is for revenues of US$309.0m in 2025, which would reflect an uncomfortable 9.7% decline in revenue compared to the last year of performance. Per-share losses are expected to explode, reaching US$0.23 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$330.3m and losses of US$0.30 per share in 2025. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a considerable decrease in losses per share in particular.

There was a decent 6.1% increase in the price target to US$12.60, with the analysts clearly signalling that the expected reduction in losses is a positive, despite a weaker revenue outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on SkyWater Technology, with the most bullish analyst valuing it at US$15.00 and the most bearish at US$10.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 9.7% by the end of 2025. This indicates a significant reduction from annual growth of 22% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 16% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - SkyWater Technology is expected to lag the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on SkyWater Technology. Long-term earnings power is much more important than next year's profits. We have forecasts for SkyWater Technology going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for SkyWater Technology you should be aware of.

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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.