Financial Analysis: Qualcomm (NASDAQ:QCOM) and SkyWater Technology (NASDAQ:SKYT)

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

Institutional & Insider Ownership

74.4% of Qualcomm shares are owned by institutional investors. Comparatively, 70.0% of SkyWater Technology shares are owned by institutional investors. 0.1% of Qualcomm shares are owned by company insiders. Comparatively, 22.6% of SkyWater Technology shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Qualcomm	$44.28 billion	5.95	$5.54 billion	$9.20	27.18
SkyWater Technology	$442.14 million	4.27	$118.91 million	$2.33	16.47

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 Ratings

This is a summary of current ratings and target prices for Qualcomm and SkyWater Technology, as reported by MarketBeat.

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

Qualcomm currently has a consensus price target of $181.79, indicating a potential downside of 27.29%. SkyWater Technology has a consensus price target of $32.00, indicating a potential downside of 16.60%. Given SkyWater Technology’s higher probable upside, analysts clearly believe SkyWater Technology is more favorable than Qualcomm.

Risk and Volatility

Qualcomm has a beta of 1.59, suggesting that its share price is 59% more volatile than the S&P 500. Comparatively, SkyWater Technology has a beta of 3.32, suggesting that its share price is 232% more volatile than the S&P 500.

Profitability

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

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

Summary

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

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.

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.