Critical Survey: SkyWater Technology (NASDAQ:SKYT) and Qualcomm (NASDAQ:QCOM)

SkyWater Technology (NASDAQ:SKYT) and Qualcomm (NASDAQ:QCOM) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, risk, dividends and analyst recommendations.

Earnings and Valuation

This table compares SkyWater Technology and Qualcomm”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SkyWater Technology	$442.14 million	4.30	$118.91 million	$2.33	16.58
Qualcomm	$44.49 billion	5.77	$5.54 billion	$9.20	26.48

Qualcomm has higher revenue and earnings than SkyWater Technology. SkyWater Technology is trading at a lower price-to-earnings ratio than Qualcomm, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and price targets for SkyWater Technology and Qualcomm, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SkyWater Technology	1	6	1	0	2.00
Qualcomm	4	16	14	0	2.29

SkyWater Technology presently has a consensus price target of $32.00, suggesting a potential downside of 17.15%. Qualcomm has a consensus price target of $181.79, suggesting a potential downside of 25.38%. Given SkyWater Technology’s higher probable upside, equities analysts plainly believe SkyWater Technology is more favorable than Qualcomm.

Insider and Institutional Ownership

70.0% of SkyWater Technology shares are owned by institutional investors. Comparatively, 74.3% of Qualcomm shares are owned by institutional investors. 37.9% of SkyWater Technology shares are owned by company insiders. Comparatively, 0.1% of Qualcomm shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares SkyWater Technology and Qualcomm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SkyWater Technology	21.04%	-7.88%	-1.93%
Qualcomm	22.31%	42.11%	19.33%

Risk and Volatility

SkyWater Technology has a beta of 3.3, suggesting that its share price is 230% more volatile than the S&P 500. Comparatively, Qualcomm has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500.

Summary

Qualcomm beats SkyWater Technology on 11 of the 14 factors compared between the two stocks.

About SkyWater Technology

SkyWater Technology, Inc., together with its subsidiaries, operates as a pure-play technology foundry that engages in the provision of semiconductor development, manufacturing, and packaging services in the United States. The company offers engineering and process development support services to co-create technologies with customers; and semiconductor manufacturing services for various silicon-based analog and mixed-signal, micro-electromechanical systems, and rad-hard integrated circuits. It serves customers operating in the computation, aerospace and defense, automotive, bio-health, consumer, and industrial sectors. The company was incorporated in 2016 and is headquartered in Bloomington, Minnesota.

About Qualcomm

Qualcomm Incorporated engages in the development and commercialization of foundational technologies for the wireless industry worldwide. It operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI). The QCT segment develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies for use in wireless voice and data communications, networking, computing, multimedia, and position location products. The QTL segment grants licenses or provides rights to use portions of its intellectual property portfolio, which include various patent rights useful in the manufacture and sale of wireless products comprising products implementing CDMA2000, WCDMA, LTE and/or OFDMA-based 5G standards and their derivatives. The QSI segment invests in early-stage companies in various industries, including 5G, artificial intelligence, automotive, consumer, enterprise, cloud, IoT, and extended reality, and investments, including non-marketable equity securities and, to a lesser extent, marketable equity securities, and convertible debt instruments. It also provides development, and other services and related products to the United States government agencies and their contractors. The company was incorporated in 1985 and is headquartered in San Diego, California.