Critical Contrast: SkyWater Technology (NASDAQ:SKYT) & IQE (OTCMKTS:IQEPF)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
IQE	N/A	N/A	N/A
SkyWater Technology	21.04%	-7.88%	-1.93%

Risk & Volatility

IQE has a beta of 1.68, indicating that its stock price is 68% more volatile than the S&P 500. Comparatively, SkyWater Technology has a beta of 3.34, indicating that its stock price is 234% more volatile than the S&P 500.

Insider and Institutional Ownership

70.0% of SkyWater Technology shares are held by institutional investors. 22.6% of SkyWater Technology shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares IQE and SkyWater Technology”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
IQE	$150.84 million	3.22	-$48.79 million	N/A	N/A
SkyWater Technology	$442.14 million	3.72	$118.91 million	$2.33	14.33

SkyWater Technology has higher revenue and earnings than IQE.

Analyst Recommendations

This is a summary of current recommendations and price targets for IQE and SkyWater Technology, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
IQE	0	0	1	0	3.00
SkyWater Technology	1	6	1	0	2.00

SkyWater Technology has a consensus target price of $32.00, suggesting a potential downside of 4.13%. Given SkyWater Technology’s higher possible upside, analysts plainly believe SkyWater Technology is more favorable than IQE.

Summary

SkyWater Technology beats IQE on 8 of the 11 factors compared between the two stocks.

About IQE

IQE plc, together with its subsidiaries, develops, manufactures, and sells advanced semiconductor materials. It operates through three segments: Wireless, Photonics, and CMOS++. The company manufactures and sells compound semiconductor materials for the wireless market which includes radio frequency devices for wireless communications, and photonics market, that includes applications that transmit and sense visible and infrared lights, as well as advanced semiconductor materials related to silicon. It operates in the United States, rest of the Americas, France, Germany, Israel, the United Kingdom, rest of Europe, the Middle East, Africa, the People's Republic of China, Japan, Taiwan, and rest of the Asia-Pacific. The company was founded in 1988 and is headquartered in Cardiff, the United Kingdom.

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.