- Following a very successful IPO earlier this year, shares of SkyWater Technology sold off on perceived weak preliminary Q2 numbers.
- Adjusted for outsized Q1 tooling revenue contributions, sequential revenue growth of up to 20% looks decent.
- Analysts likely failed to adjust their models to a more sustainable tooling revenue contribution going forward, thus causing FY2021 growth estimates to be overly aggressive.
- Expect the analyst community to remain supportive despite the near-term requirement to lower estimates given still respectable potential year-over-year top line growth of 40%+.
- Going forward, the company needs to do a better job managing market participants' expectations by providing at least quarterly guidance and breaking out tooling revenues. Speculative investors should consider using Tuesday's selloff as a buying opportunity.
For further details see:
SkyWater Technology - Market Participants' Misconceptions Behind Both The Recent Rally And Tuesday's Selloff - Buy