Analog Devices, Inc. (ADI) and SkyWater Technology, Inc. (SKYT) are two key players in the semiconductor industry, each offering unique strengths in innovation and market presence. ADI is a well-established giant known for its integrated circuits and signal processing technologies, while SKYT focuses on semiconductor manufacturing services and co-development. This article will analyze both companies to help you identify the most compelling investment opportunity in this dynamic sector.
Table of contents
Companies Overview
I will begin the comparison between Analog Devices, Inc. and SkyWater Technology, Inc. by providing an overview of these two companies and their main differences.
Analog Devices Overview
Analog Devices, Inc. designs, manufactures, tests, and markets integrated circuits and subsystems that use analog, mixed-signal, and digital signal processing technologies. It focuses on data converters, power management products, amplifiers, RF and microwave ICs, and microelectromechanical systems for industrial, automotive, consumer, aerospace, and communications markets globally. The company is well-established with a market cap of about 149B USD and a workforce of 24,000 employees.
SkyWater Technology Overview
SkyWater Technology, Inc. specializes in semiconductor development and manufacturing services, including engineering and process development for silicon-based analog, mixed-signal, power discrete, MEMS, and rad-hard ICs. It serves sectors such as aerospace, defense, automotive, bio-health, and IoT. Founded in 2017, SkyWater is smaller with a market cap near 1.5B USD and about 700 employees, focusing on collaborative technology co-creation with its customers.
Key similarities and differences
Both companies operate in the semiconductor industry and provide analog and mixed-signal technology solutions. However, Analog Devices is a mature, diversified semiconductor designer and manufacturer with a broad global reach and extensive product portfolio. In contrast, SkyWater is a newer, smaller contract manufacturer focusing on specialized semiconductor fabrication and co-development services, targeting niche markets such as aerospace and defense. Their business models differ primarily in scale and operational focus.
Income Statement Comparison
This table compares key income statement metrics for Analog Devices, Inc. and SkyWater Technology, Inc. for their most recent fiscal years, highlighting differences in scale and profitability.
| Metric | Analog Devices, Inc. (ADI) | SkyWater Technology, Inc. (SKYT) |
|---|---|---|
| Market Cap | 149.4B | 1.54B |
| Revenue | 11.0B | 342M |
| EBITDA | 5.03B | 25.3M |
| EBIT | 3.03B | 6.56M |
| Net Income | 2.27B | -6.79M |
| EPS | 4.59 | -0.14 |
| Fiscal Year | 2025 | 2024 |
Income Statement Interpretations
Analog Devices, Inc.
Analog Devices, Inc. exhibited steady revenue growth from $7.3B in 2021 to $11B in 2025, with net income rising from $1.39B to $2.27B. Margins improved overall, with a gross margin of 54.66% and net margin of 20.58% in 2025. The latest year saw a favorable 16.9% revenue increase and a significant 44.3% EBIT growth, indicating strengthened profitability.
SkyWater Technology, Inc.
SkyWater Technology, Inc. increased revenue from $140M in 2020 to $342M in 2024, alongside a net loss narrowing from -$20M to -$6.8M. Gross margin improved to 20.34%, but net margin remained negative at -1.98%. The most recent year showed a 19.4% revenue rise and a 144.4% EBIT growth, reflecting operational progress despite ongoing losses.
Which one has the stronger fundamentals?
Analog Devices demonstrates stronger fundamentals with consistently favorable margins, positive net income, and solid growth across revenue and earnings. SkyWater shows promising revenue and EBIT improvements, yet its persistent net losses and negative margins present ongoing challenges. Overall, Analog Devices’ income statement reflects greater stability and profitability.
Financial Ratios Comparison
The table below presents a factual comparison of the most recent financial ratios for Analog Devices, Inc. (ADI) and SkyWater Technology, Inc. (SKYT), based on their fiscal year 2025 and 2024 data respectively.
| Ratios | Analog Devices, Inc. (ADI) FY 2025 | SkyWater Technology, Inc. (SKYT) FY 2024 |
|---|---|---|
| ROE | 6.7% | -11.8% |
| ROIC | 5.5% | 3.4% |
| P/E | 51.1 | -100.3 |
| P/B | 3.42 | 11.82 |
| Current Ratio | 2.19 | 0.86 |
| Quick Ratio | 1.68 | 0.76 |
| D/E (Debt-to-Equity) | 0.26 | 1.33 |
| Debt-to-Assets | 18.1% | 24.5% |
| Interest Coverage | 9.45 | 0.74 |
| Asset Turnover | 0.23 | 1.09 |
| Fixed Asset Turnover | 3.32 | 2.07 |
| Payout Ratio | 84.9% | 0% |
| Dividend Yield | 1.66% | 0% |
Interpretation of the Ratios
Analog Devices, Inc.
Analog Devices shows a balanced financial profile with favorable net margin (20.58%) and strong liquidity ratios (current ratio 2.19, quick ratio 1.68). However, the company faces some challenges with a relatively high PE ratio (51.05) and low return on equity (6.7%). Its dividend yield stands at 1.66%, indicating modest shareholder returns with a stable payout supported by free cash flow.
SkyWater Technology, Inc.
SkyWater Technology exhibits weaker financial ratios with negative net margin (-1.98%) and return on equity (-11.79%), alongside poor liquidity (current ratio 0.86, quick ratio 0.76). The firm does not pay dividends, reflecting its ongoing reinvestment phase and growth focus. High debt levels (D/E 1.33) and low interest coverage (0.74) highlight financial risk concerns.
Which one has the best ratios?
Analog Devices presents a more favorable ratio profile overall, with half of its key metrics rated positively and solid liquidity and profitability indicators. SkyWater Technology’s ratios are largely unfavorable, marked by losses, weak coverage, and high leverage. Therefore, Analog Devices has the comparatively stronger financial ratios based on the available data.
Strategic Positioning
This section compares the strategic positioning of Analog Devices, Inc. and SkyWater Technology, Inc. including their market position, key segments, and exposure to technological disruption:
Analog Devices, Inc.
- Large market cap of 149B in semiconductors, facing global competition.
- Diversified revenue streams across automotive, industrial, consumer, and communications segments.
- Exposure to analog, mixed-signal, and digital signal processing technologies with broad applications.
SkyWater Technology, Inc.
- Small market cap of 1.5B with higher beta, indicating higher volatility and competitive pressure.
- Concentrated on semiconductor manufacturing and engineering services for niche industries like aerospace and bio-health.
- Focus on silicon-based analog, mixed-signal, power discrete, and rad-hard IC manufacturing services.
Analog Devices, Inc. vs SkyWater Technology, Inc. Positioning
ADI shows a diversified approach with broad market segments and product lines, offering a wide industrial footprint. SKYT concentrates on manufacturing services and niche markets, providing targeted technological support but with less diversification and scale.
Which has the best competitive advantage?
Both companies are slightly unfavorable in MOAT evaluation, shedding value but showing growing ROIC trends. Neither demonstrates a strong competitive advantage based on current ROIC versus WACC metrics.
Stock Comparison
The stock price movements of Analog Devices, Inc. (ADI) and SkyWater Technology, Inc. (SKYT) over the past year exhibit significant bullish trends with notable acceleration in gains and differing volatility profiles.
Trend Analysis
Analog Devices, Inc. (ADI) shows a strong bullish trend over the past 12 months with a 58.91% increase, marked by acceleration and high volatility (std deviation 24.21). The stock ranged between 164.6 and 302.1.
SkyWater Technology, Inc. (SKYT) posted an even stronger bullish trend with a 236.8% gain over the same period, accelerating steadily and demonstrating lower volatility (std deviation 4.41). Prices moved from 6.1 to 32.03.
Comparing both, SKYT delivered the highest market performance with substantially larger percentage growth, while ADI exhibited greater volatility but also solid positive momentum.
Target Prices
The target price consensus for these semiconductor companies reflects mixed expectations.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Analog Devices, Inc. | 375 | 270 | 304.73 |
| SkyWater Technology, Inc. | 25 | 25 | 25 |
Analysts see Analog Devices trading slightly above its current price of $302.1, while SkyWater Technology’s consensus target of $25 is well below its current price of $32.03, indicating differing outlooks.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Analog Devices, Inc. (ADI) and SkyWater Technology, Inc. (SKYT):
Rating Comparison
ADI Rating
- Rating: B-, considered very favorable overall.
- Discounted Cash Flow Score: 4, favorable assessment of future cash flows.
- ROE Score: 3, moderate efficiency in generating profit from equity.
- ROA Score: 3, moderate effectiveness in asset utilization.
- Debt To Equity Score: 2, moderate financial risk.
- Overall Score: 3, moderate overall financial standing.
SKYT Rating
- Rating: B+, considered very favorable overall.
- Discounted Cash Flow Score: 1, very unfavorable view on future cash flows.
- ROE Score: 5, very favorable efficiency in generating profit from equity.
- ROA Score: 5, very favorable effectiveness in asset utilization.
- Debt To Equity Score: 1, very unfavorable financial risk due to high leverage.
- Overall Score: 3, moderate overall financial standing.
Which one is the best rated?
SKYT holds a higher rating (B+) than ADI (B-), with superior ROE and ROA scores indicating better profitability and asset use. However, SKYT’s discounted cash flow and debt-to-equity scores are weaker, reflecting higher financial risk compared to ADI.
Scores Comparison
Here is a comparison of the financial scores for Analog Devices, Inc. and SkyWater Technology, Inc.:
ADI Scores
- Altman Z-Score: 6.99, indicating a safe zone status.
- Piotroski Score: 7, reflecting strong financial health.
SKYT Scores
- Altman Z-Score: 2.20, placing the company in a grey zone.
- Piotroski Score: 5, indicating average financial strength.
Which company has the best scores?
Based on the provided data, ADI has the best scores with a higher Altman Z-Score in the safe zone and a stronger Piotroski Score. SKYT’s scores are lower, with an Altman Z-Score in the grey zone and an average Piotroski Score.
Grades Comparison
The following presents the latest grades and ratings from recognized grading companies for both Analog Devices, Inc. and SkyWater Technology, Inc.:
Analog Devices, Inc. Grades
This table summarizes recent grades assigned by reputable financial institutions to Analog Devices, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Keybanc | Maintain | Overweight | 2026-01-13 |
| Truist Securities | Maintain | Hold | 2025-12-19 |
| UBS | Maintain | Buy | 2025-12-08 |
| Wells Fargo | Maintain | Equal Weight | 2025-11-26 |
| B of A Securities | Maintain | Buy | 2025-11-26 |
| Evercore ISI Group | Maintain | Outperform | 2025-11-26 |
| JP Morgan | Maintain | Overweight | 2025-11-26 |
| Baird | Maintain | Outperform | 2025-11-26 |
| Benchmark | Maintain | Buy | 2025-11-26 |
| Truist Securities | Maintain | Hold | 2025-11-26 |
The grades for Analog Devices, Inc. exhibit a predominantly positive consensus, with multiple “Buy,” “Outperform,” and “Overweight” ratings, alongside some “Hold” and “Equal Weight” opinions.
SkyWater Technology, Inc. Grades
This table summarizes recent grades assigned by reputable financial institutions to SkyWater Technology, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Needham | Maintain | Buy | 2025-11-06 |
| Piper Sandler | Maintain | Overweight | 2025-11-06 |
| TD Cowen | Maintain | Buy | 2025-11-06 |
| Needham | Maintain | Buy | 2025-08-07 |
| Needham | Maintain | Buy | 2025-05-08 |
| Needham | Maintain | Buy | 2025-02-27 |
| Needham | Maintain | Buy | 2024-11-11 |
| Piper Sandler | Maintain | Overweight | 2024-10-25 |
| Piper Sandler | Maintain | Overweight | 2024-08-08 |
| Needham | Maintain | Buy | 2024-05-09 |
Grades for SkyWater Technology, Inc. consistently reflect a “Buy” or “Overweight” stance from the same few grading companies over multiple dates, indicating steady positive sentiment.
Which company has the best grades?
Both companies have received a “Buy” consensus from analysts; however, Analog Devices, Inc. shows a broader range of grading institutions with slightly more diverse opinions including “Hold” and “Equal Weight.” SkyWater Technology, Inc. benefits from a more uniform “Buy” and “Overweight” rating trend from fewer grading firms. This could suggest different market perceptions and risk profiles, potentially impacting investor confidence and portfolio allocation decisions.
Strengths and Weaknesses
Below is a comparative overview of the key strengths and weaknesses of Analog Devices, Inc. (ADI) and SkyWater Technology, Inc. (SKYT) based on their recent financial and operational performance.
| Criterion | Analog Devices, Inc. (ADI) | SkyWater Technology, Inc. (SKYT) |
|---|---|---|
| Diversification | Broad product portfolio across Automotive, Industrial, Communications, and Consumer segments with Industrial leading at $4.3B in 2024 | Primarily focused on Advanced Technology Services and Wafer Services, more narrow revenue base (~$160M in 2024) |
| Profitability | Positive net margin (20.58%), stable cash position, but ROIC below WACC indicating slight value destruction | Negative net margin (-1.98%), negative ROE, ROIC below WACC, indicating ongoing losses and value erosion |
| Innovation | Steady growth in ROIC (+64% trend) despite current value destruction, strong fixed asset turnover (3.32) | Strong ROIC growth trend (+171%) but still shedding value; innovation in niche semiconductor manufacturing |
| Global presence | Large global footprint with diversified industrial applications and automotive markets | Smaller scale with focus on specialized semiconductor manufacturing; less global reach |
| Market Share | Well-established market leader in analog and mixed-signal ICs | Emerging player in semiconductor fabrication services, smaller market share |
Key takeaways: ADI demonstrates strong diversification and profitability metrics with improving operational efficiency, though it currently experiences slight value destruction. SKYT shows rapid ROIC growth and niche innovation but faces significant profitability challenges and a narrower market scope. Investors should weigh ADI’s stability and SKYT’s growth potential against their respective risks.
Risk Analysis
Below is a comparative table of key risks for Analog Devices, Inc. (ADI) and SkyWater Technology, Inc. (SKYT) as of the most recent fiscal years:
| Metric | Analog Devices, Inc. (ADI) | SkyWater Technology, Inc. (SKYT) |
|---|---|---|
| Market Risk | Moderate (Beta 1.03) | High (Beta 3.49) |
| Debt level | Low (Debt/Equity 0.26) | High (Debt/Equity 1.33) |
| Regulatory Risk | Moderate | Moderate |
| Operational Risk | Low (24K employees, diversified markets) | Moderate (700 employees, niche manufacturing) |
| Environmental Risk | Moderate (Tech industry standards) | Moderate (Manufacturing processes) |
| Geopolitical Risk | Moderate (Global operations) | Moderate (US-based, defense exposure) |
The most impactful risks here are SkyWater’s high market volatility and elevated financial leverage, increasing its vulnerability to economic downturns. Analog Devices maintains a safer financial profile with strong liquidity and low debt, but both face typical semiconductor sector regulatory and geopolitical uncertainties.
Which Stock to Choose?
Analog Devices, Inc. (ADI) shows favorable income evolution with consistent revenue and net income growth, strong profitability metrics, low debt levels, and a very favorable overall rating. However, its ROIC is below WACC, indicating slight value destruction despite improving profitability.
SkyWater Technology, Inc. (SKYT) presents favorable income growth but reports negative net margins and high debt. Financial ratios are mostly unfavorable, though it holds a very favorable rating with strong ROE and ROA scores. Its ROIC is also below WACC, signaling value destruction amid rising profitability.
For investors prioritizing stable profitability and moderate financial health, ADI might appear more favorable given its solid income and balanced ratios. Conversely, those with a higher risk tolerance focused on rapid growth could find SKYT’s accelerating price trend and income growth more appealing despite its financial challenges.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Analog Devices, Inc. and SkyWater Technology, Inc. to enhance your investment decisions:
