SKYT
SkyWater Technology, Inc.
$32.46
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Fair Value
Trading 16.9% below fair value
You pay
$32.46
Bear
$29.28
Fair
$39.04
Bull
$48.80
Bear
$29.28
-9.8%
$2.44 × 12x
Fair
$39.04
+20.3%
$2.44 × 16x
Bull
$48.80
+50.3%
$2.44 × 20x
Adjust Assumptions
16.0x
2.44$
Key Value Driver
Through-cycle normalized EPS ($2.44)
Implied Market Multiple
13.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (6 analysts)
$29.00
Divergence from AlphaVal
35%
Summary
Using 7-year normalized EPS of $2.44 at a 16x cycle multiple, the base-case value is $39.04 per share. P/TBV cross-check: 8.9x.
Warnings
Price-to-book value of 8.9x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $29.00 (from 6 analysts). Our estimate is 35% above the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing