It's been a good week for SkyWater Technology, Inc. (NASDAQ:SKYT) shareholders, because the company has just released its latest yearly results, and the shares gained 6.7% to US$11.05. The results don't look great, especially considering that statutory losses grew 66% toUS$1.76 per share. Revenues of US$163m did beat expectations by 2.5%, but it looks like a bit of a cold comfort. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on SkyWater Technology after the latest results.
Taking into account the latest results, the consensus forecast from SkyWater Technology's four analysts is for revenues of US$197.3m in 2022, which would reflect a sizeable 21% improvement in sales compared to the last 12 months. Losses are supposed to decline, shrinking 18% from last year to US$1.05. Before this earnings announcement, the analysts had been modelling revenues of US$190.8m and losses of US$1.05 per share in 2022.
The consensus price target fell 26% to US$18.00as the analysts signal that ongoing losses are likely to weigh on the stock price. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic SkyWater Technology analyst has a price target of US$25.00 per share, while the most pessimistic values it at US$15.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await SkyWater Technology shareholders.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting SkyWater Technology's growth to accelerate, with the forecast 21% annualised growth to the end of 2022 ranking favourably alongside historical growth of 8.0% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 11% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that SkyWater Technology is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 2024, and you can see them free on our platform here.
You still need to take note of risks, for example - SkyWater Technology has 4 warning signs (and 1 which is a bit concerning) we think you should know about.
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.