Core Insights - SkyWater Technology (SKYT) achieved a significant turnaround in profitability in Q1 2025, with non-GAAP gross profit increasing to $14.8 million from $13.4 million, resulting in a gross margin of 24.2%, a 730-basis-point improvement year over year [2][10] - The launch of ThermaView in January 2025 has driven a 70% sequential increase in Wafer Services revenues, reaching $7.5 million, indicating a shift in SkyWater's product mix towards new offerings [3][10] - Management anticipates continued growth in Wafer Services throughout 2025, supported by customer ramps and a growing innovation pipeline, alongside the recent acquisition of Fab 25 to expand manufacturing capacity [4][10] Financial Performance - SkyWater expects both GAAP and non-GAAP gross margins to remain in the 23%-27% range for the full year 2025, with potential for further upside due to improved cost control and a more disciplined tools mix [5][10] - The Zacks Consensus Estimate for 2025 revenues is projected at $307.15 million, reflecting a 10.26% decline from 2024, while the estimated loss is pegged at 1 cent per share, indicating a sharp decline of 116.67% year-over-year [12] Competitive Landscape - GlobalFoundries (GFS) reported $1.6 billion in Q1 2025, significantly outpacing SkyWater, with strengths in strategic partnerships and AI-related semiconductor manufacturing [6] - ON Semiconductor (ON) focuses on intelligent power and sensing solutions, leveraging a vertically integrated model that provides cost advantages, particularly in the growing EV market [7] Share Price and Valuation - SkyWater shares have declined 23.3% year to date, contrasting with a 7% return in the broader Zacks Computer and Technology sector and a 13.4% rise in the Electronics – Semiconductors industry [8] - Currently, SkyWater is trading at a forward 12-month Price/Sales ratio of 1.48X compared to the industry's 8.6X, with a Value Score of B [11]

Key Takeaways SKYT trades at a 1.39X forward P/S, far below the 8.76X industry average and key semiconductor peers. ThermaView drove a 70% QoQ jump in Wafer Services revenues, now over half from new product offerings. Fab 25 adds 400K wafer starts and $1B in contracts, enhancing SKYT's scale and U.S. foundry positioning.SkyWater Technology (SKYT) shares are currently cheap, as suggested by the Value Score of B. In terms of forward 12-month price/sales (P/S), SKYT is trading at 1.4X, which is significantly ...

Key Takeaways SKYT plans to acquire Fab-25 to drive high-volume chip production and Wafer Services' revenue growth. A four-year, $1B supply deal is expected to add $300M in 2025 revenues for SKYT and lift cash flow. Fab-25 expands SKYT's 200 mm CMOS capacity, aligning with U.S. onshoring and secure chip demand.SkyWater Technology (SKYT) is making a strategic move with its planned acquisition of Fab-25 from Infineon Technologies, expected to close on June 30, 2025. The deal is poised to accelerate Wafer Se ...

Core Viewpoint - SkyWater Technology (SKYT) is expected to report first-quarter 2025 results on May 7, with anticipated revenues between $59 million and $63 million, reflecting a 23.3% year-over-year decline [1][2]. Revenue Expectations - Total revenues for the first quarter are projected to be between $59 million and $63 million, including $1 million from tool revenues and $6 million from Wafer Services revenues [1]. - The Zacks Consensus Estimate for first-quarter 2025 revenues is $61.05 million [1]. Earnings Projections - Non-GAAP earnings are expected to be between 10-16 cents per share for the first quarter of 2025 [1]. - The consensus estimate for the bottom line indicates a loss of 13 cents per share, which is a wider loss compared to the year-ago quarter's loss of 8 cents [2]. Performance Drivers - SkyWater is anticipated to benefit from improved wafer services revenues due to product innovation and strategic conversions from Advanced Technology Services (ATS) to wafer services [3]. - The company is expected to gain from early traction with ThermaView solutions, supported by Raytheon Vision Systems, which positions SkyWater to meet growing demand in defense, industrial, and healthcare markets [4]. - The acquisition of Fab 25 is projected to add $300 million in annual wafer service revenues and significantly enhance domestic manufacturing capacity, contributing to stronger customer confidence and operational gains [5]. Challenges - Uncertainty regarding the U.S. federal government budget and ongoing negotiations may negatively impact SkyWater's performance, particularly affecting ATS revenues [6]. Earnings Model Insights - According to the Zacks model, SkyWater currently has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold), indicating a lower likelihood of an earnings beat [7].