SkyWater Technology, Inc. (NASDAQ:SKYT) Just Reported, And Analysts Assigned A US$11.84 Price Target

Shareholders in SkyWater Technology, Inc. (NASDAQ:SKYT) had a terrible week, as shares crashed 25% to US$7.64 in the week since its latest first-quarter results. The statutory results were not great - while revenues of US$80m were in line with expectations,SkyWater Technology lost US$0.12 a share in the process. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for SkyWater Technology

After the latest results, the four analysts covering SkyWater Technology are now predicting revenues of US$335.0m in 2024. If met, this would reflect a meaningful 12% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 83% to US$0.12. Before this latest report, the consensus had been expecting revenues of US$330.7m and US$0.12 per share in losses.

The analysts trimmed their valuations, with the average price target falling 11% to US$11.84, with the ongoing losses seemingly weighing on sentiment, despite no real changes to the earnings forecasts. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. 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$6.20 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the SkyWater Technology's past performance and to peers in the same industry. We would highlight that SkyWater Technology's revenue growth is expected to slow, with the forecast 16% annualised growth rate until the end of 2024 being well below the historical 25% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 17% annually. Factoring in the forecast slowdown in growth, it looks like SkyWater Technology is forecast to grow at about the same rate as 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of SkyWater Technology's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple SkyWater Technology analysts - going out to 2025, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for SkyWater Technology that you need to be mindful 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.