SkyWater Technology Inc

Worth knowing

• Profit looks boosted by one-off gains. Reported profit is 2.0× operating cash profit (EBITDA), lifted by income outside the core business.Reported profit is 2.0× operating cash profit, lifted by income outside the core business.

  SkyWater Technology's reported profit is 2.0× its operating cash profit (EBITDA), which is unusual: normally it's the other way round. Income outside the core business, such as interest on a large cash pile, gains on investments or asset sales, or tax items, has lifted net income, so its earnings-based valuation may look cheaper than the business alone justifies.SkyWater Technology's reported profit is 2.0× its operating cash profit, which is unusual: normally it's the other way round. Income outside the core business, such as interest on a large cash pile, gains on investments or asset sales, or tax items, has lifted net income, so its earnings-based valuation may look cheaper than the business alone justifies.

• Profitable, but burning cash. Reports a profit, but free cash flow is negative.

  SkyWater Technology reports a profit but its free cash flow is negative: it spent more on investment and running the business than it brought in. That's common for companies building capacity, but it means the profit isn't yet turning into cash.

• Valuation signals disagree. Cheaper than 89% of peers on earnings, but only 0% on free cash flow.

  Relative to its earnings, SkyWater Technology looks cheaper than 89% of peers; relative to its free cash flow, cheaper than only 0%. The valuation score blends the two, so look at which measure fits this business best.

• Growing fast, still losing money. Revenue grew faster than 86% of peers, at an operating loss.

  Revenue grew faster than 86% of peers, but the business runs at an operating loss (margin -0.6%).