Head-To-Head Analysis: SkyWater Technology (NASDAQ:SKYT) & AXT (NASDAQ:AXTI)

SkyWater Technology (NASDAQ:SKYT) and AXT (NASDAQ:AXTI) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, valuation and earnings.

Earnings & Valuation

This table compares SkyWater Technology and AXT’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SkyWater Technology	$286.68 million	1.36	-$30.76 million	($0.69)	-11.93
AXT	$75.79 million	2.03	-$17.88 million	($0.40)	-8.65

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SkyWater Technology	-10.73%	-32.59%	-6.66%
AXT	-21.01%	-7.40%	-4.76%

Risk & Volatility

SkyWater Technology has a beta of 4.18, indicating that its stock price is 318% more volatile than the S&P 500. Comparatively, AXT has a beta of 2.28, indicating that its stock price is 128% more volatile than the S&P 500.

Institutional and Insider Ownership

70.0% of SkyWater Technology shares are owned by institutional investors. Comparatively, 49.5% of AXT shares are owned by institutional investors. 42.6% of SkyWater Technology shares are owned by company insiders. Comparatively, 8.4% of AXT shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for SkyWater Technology and AXT, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SkyWater Technology	0	0	4	0	3.00
AXT	0	0	4	0	3.00

SkyWater Technology presently has a consensus price target of $13.25, indicating a potential upside of 61.00%. AXT has a consensus price target of $5.38, indicating a potential upside of 55.35%. Given SkyWater Technology’s higher possible upside, equities research analysts plainly believe SkyWater Technology is more favorable than AXT.

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 AXT

AXT, Inc. designs, develops, manufactures, and distributes compound and single element semiconductor substrates. The company offers indium phosphide for use in data center connectivity using light/lasers, high-speed data transfer in data centers, 5G communications, fiber optic lasers and detectors, consumer devices, passive optical networks, silicon photonics, photonic integrated circuits, thermo-photovoltaics, RF amplifier and switching, infrared light-emitting diode (LEDS) motion control, lidar for robotics and autonomous vehicles, and infrared thermal imaging. It also provides semi-insulating gallium arsenide (GaAs) substrates for use in Wi-Fi and IoT devices, transistors, direct broadcast television, power amplifiers, satellite communications, and solar cells; and semi-conducting GaAs substrates that are used in LEDs, screen displays using micro-LEDs, printer head lasers and LEDs, 3-D sensing using VCSELs, data center communication using VCSELs, sensors for industrial robotics/near-infrared sensors, optical couplers, solar cells, night vision goggles, lidar for robotics and autonomous vehicles, and other lasers, as well as laser machining, cutting, and drilling. In addition, the company offers germanium substrates for use in multi-junction solar cells for satellites, optical sensors and detectors, terrestrial concentrated photo voltaic cells, infrared detectors, and carrier wafer for LED. Further, it provides 6N+ and 7N+ purified gallium, boron trioxide, gallium-magnesium alloy, pyrolytic boron nitride (pBN) crucibles, and pBN insulating parts. It sells its products through direct salesforce in the United States, China, and Europe, as well as through independent sales representatives and distributors in Japan, Taiwan, Korea, and internationally. The company was formerly known as American Xtal Technology, Inc. and changed its name to AXT, Inc. in July 2000. AXT, Inc. was incorporated in 1986 and is headquartered in Fremont, California.