SkyWater Technology, LLC

Where It Passes

Where It Falls Short

• Efficiency0% pass✗ 11▾

  All 8 investors flag SKYT's efficiency

  Current Ratio0.57

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)-18.1%

  ✗Buffett> 10%

  ROIC - WACC-28.1%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)1.3%

  ✗Greenblatt> 25%

  Current Ratio Change YoY0.84 -> 0.60

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY1.10x -> 0.60x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities0.57

  ✗Dreman> 1.5

  Return on Invested Capital1.5%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=-12.5%; FY2024: ROIC=5.4%; FY2025: ROIC=-0.9%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC-0.9% (RR=100% x ROIC=-0.9%)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest -0.9%)

  ✗SleepROIC > 12% in a majority of years
• Valuation15% pass✓ 6✗ 22▾

  11 of 13 flag SKYT's valuation — Graham, Lynch, Greenblatt +8 more

  Net income / market capitalization+7.36%; #1116/6340 (top 17.6%)

  ✓AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Price / 3-yr avg EPS60.1x

  ✗Graham<= 15x

  Price-to-Book Ratio8.3x

  ✗Graham<= 1.5x

  P/E x P/B498.60

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)P/E 13.3x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value0.3%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=0.3%, ROC=1.3%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS13.3x

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)N/A (negative CFPS)

  ✗Dreman< 8x

  Price / Book Value per Share8.3x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=13.3x, OE Yield=8.4%

  ✓MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=13.3x, FCF Yield=-3.3%

  ✓PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=13.3x, P/B=8.3x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-300.7% (IV=$8.10 vs Price=$32.46)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Price vs. Trailing Low458% of trailing low ($7.09)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Positive book equity / market capitalization+0.1110; #4692/6449 (top 72.8%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS13.3x

  ✓NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share8.72x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change+155.5%

  ✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.4000; #2927/5247 (top 55.8%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization-5.96%; #3034/4519 (top 67.1%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+1.76%; #2470/6202 (top 39.8%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Profitability19% pass✓ 13✗ 22▾

  13 of 16 flag SKYT's profitability — Graham, Buffett, Lynch +10 more

  Net income / market capitalization+7.36%; #1116/6340 (top 17.6%)

  ✓AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive EPS (10 years)1/7 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)N/A (negative base EPS)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)1/7 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-32.6%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-0.6% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$130.2M

  ✓BuffettPositive and growing

  Earnings Variance (10-yr CoV)N/A (negative mean EPS)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)P/E 13.3x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE66.3%

  ✓Lynch> 15%

  EBIT / Enterprise Value0.3%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=0.3%, ROC=1.3%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets16.20%

  ✓PiotroskiROA > 0

  ROA Change YoY-2.18% -> 16.20% (delta: +18.38%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=-3.95%, ROA=16.20%

  ✗PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY20.3% -> 19.7%

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue14.5%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity66.3%

  ✓Dreman> 12%

  Margin of SafetyP/E=13.3x, P/B=8.3x

  ✓PabraiP/B < 1.5 or P/E < 15

  Return on Equity-2.0% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-300.7% (IV=$8.10 vs Price=$32.46)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency1/6 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue0.7%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity66.3%

  ✓Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-5.2% (2023) -> -0.6% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 20.7% -> 19.7%, operating margin -5.2% -> -0.6%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  Gross profit / total assets+17.87%; #2207/3702 (top 59.6%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+66.28%; #149/5226 (top 2.9%)

  ✓AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.1220; #3719/5884 (top 63.2%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years1/6 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Cash Flow20% pass✓ 2✗ 10▾

  8 of 10 flag SKYT's cash flow — Lynch, Piotroski, Dreman +5 more

  Free Cash Flow Proxy$130.2M

  ✓BuffettPositive and growing

  FCF Positive and Growing$-53.3M

  ✗LynchPositive and growing

  Operating Cash Flow$-29.0M

  ✗PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=-3.95%, ROA=16.20%

  ✗PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)N/A (negative CFPS)

  ✗Dreman< 8x

  P/E or FCF YieldP/E=13.3x, FCF Yield=-3.3%

  ✓PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive3/6 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap-6.1%

  ✗Ackman>= 4%

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency3/6 years positive

  ✗SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$-95.1M

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization-5.96%; #3034/4519 (top 67.1%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Growth25% pass✓ 6✗ 7▾

  6 of 8 flag SKYT's growth — Graham, Lynch, Dreman +3 more

  EPS Growth (3-yr avg, 10-yr window)N/A (negative base EPS)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)P/E 13.3x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 96.0% vs Rev: 120.5%

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction$-1.15 (2020) -> $2.44 (2025)

  ✓DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency1/6 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth29.2%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency4/5 years with positive EPS growth

  ✓AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 20.7% -> 19.7%, operating margin -5.2% -> -0.6%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR25.8%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Valuation models25% pass✓ 1✗ 3▾

  Models split on SKYT at $32.46 — fair values range $8.10–$42.75

  Graham fair value$14.66

  ✗Graham-121.4% margin vs $32.46

  Buffett fair value$32.07

  ✗Buffett-1.2% margin vs $32.46

  Dreman fair value$8.10

  ✗Dreman-300.7% margin vs $32.46

  Pabrai fair value$42.75

  ✓Pabrai+24.1% margin vs $32.46
• Debt & Leverage33% pass✓ 6✗ 9▾

  8 of 12 flag SKYT's debt & leverage — Graham, Buffett, Lynch +5 more

  Debt Levels0.40

  ✓MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  LT Debt vs Net Current AssetsLT Debt $61.1M vs NCA $-138.3M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.40, IC: 0.2x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.40

  ✗Lynch< 0.33

  Cash - Long-term Debt$-48.5M

  ✗LynchPositive preferred

  LT Debt / Total Assets Change11.13% -> 4.49%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities0.57

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.40

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Interest Coverage & Debt/EBITDAIC=0.2x, D/EBITDA=1.2x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.40

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.3995; #2241/4210 (top 53.2%)

  ✗AsnessTop 30% of eligible cross-section
• Verdicts36% pass✓ 5✗ 9▾

  Split decision: 8 FAIL · 4 PASS · 3 NEUTRAL · 1 BUY

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (2/9)✗LynchFAIL (2/7)✗GreenblattRank #1806✓PiotroskiPASS (F-Score 4)✓DremanPASS (5/11)✓MungerPASS (2/4)•PabraiNEUTRAL (2/3)✗AkreFAIL (1/6)✗MarksFAIL (1/5)✓AckmanPASS (5/9)✗TempletonFAIL (3/8)•SleepNEUTRAL (4/6)✓AsnessBUY (Rank #438/2370 (Top 18.5%))✗NeffFAIL (2/6)✗SchlossFAIL (2/7)•OshaughnessyNEUTRAL (Not ranked)