Why SkyWater Technology Stock Is Drawing Attention Now

SkyWater Technology (SKYT) is on many investors’ screens after recent returns, with the stock showing moves over the past week, month and past 3 months that prompt fresh questions about valuation and fundamentals.

At a share price of $33.43, SkyWater Technology has seen momentum build recently, with a 30 day share price return of 17.84%, while its 1 year total shareholder return of more than 3x shows how much sentiment has shifted around the stock.

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With SkyWater’s share price near US$33 and a value score of 2, along with only a small gap to the US$35 analyst target, the key question now is whether the stock is still cheap or if the market is already pricing in future growth.

Most Popular Narrative: 4.5% Undervalued

With the current price at $33.43 against a widely followed fair value of $35, the leading narrative frames SkyWater as modestly undervalued, hinging heavily on its US foundry expansion and quantum roadmap.

The recent acquisition of Fab 25, backed by a multi-year $1B supply agreement with Infineon, quadruples domestic 200mm foundry capacity and creates a platform to address rising customer demand for secure, U.S.-based chip supply, an opportunity amplified by ongoing government and private sector shifts prioritizing supply chain resilience, which is likely to drive top line revenue growth and increase revenue visibility.

Want to see what sits behind that premium and the projected fair value? The core narrative leans on sustained revenue expansion, evolving margins and a future earnings multiple that differs from the broader US semiconductor sector.

Result: Fair Value of $35 (UNDERVALUED)

However, that fair value story still hinges on smooth Fab 25 integration and steady government contract demand. Setbacks on either front could quickly challenge it.

Another Angle On Valuation

Analysts frame SkyWater as modestly undervalued at $33.43 versus a $35 fair value. The SWS DCF model, however, tells a very different story, with an estimate of $2.45 per share that points to a stock trading well above its modelled future cash flows. Which perspective do you think aligns more closely with your view of the business?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out SkyWater Technology for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 51 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Conflicted by the mix of enthusiasm and caution running through this story? To put the numbers in context, move quickly, and weigh both sides, see 3 key rewards and 3 important warning signs

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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.