Comparison MYG vs SKS

Even if they are not perfectly comparable, interesting to compare MYG and SKS, as they are driven by the same topic : electrification.

In FY 23, the 2 companies had a similar revenue : 83 m$ for SKS vs 78 m$ for Mayfield Group.
However, Mayfield was more profitable : EBITDA margin of 8.1 % for MYG vs 3.2 % for SKS.
It was also reflected in free cash flow : 6.6 m$ for MYG vs 1.3 m$ for SKS.

There was a major difference in term of revenue growth during H1 24 : + 22 % for SKS vs - 8 % for Mayfield.
But there was still a major gap in term of profitability : EBITDA margin of 9.8 % for MYG vs 5.6 % for SKS.
Once again, MYG had a much higher free cash flow : 6.1 m$ vs 2.8 m$ for SKS.

Regarding FY 24 and FY 25, SKS has also announced quite bullish forecasts : 130 m$ of revenues for FY 24 (+ 57 %) and 200 m$ for FY 25 (+ 54 %).
Mayfield has been much more cautious, not giving any indication until yesterday when they said that they still had a "robust business", doubling its final dividend and announcing a large increase of its cash for FY 24.
Mayfiled is also aiming to reach 200 m$ of revenues, but not before FY 30 and this target includes inorganic growth.

Overall, Mayfield is now valued with an EV of 59 m$ vs 178 m$ for SKS.
It corresponds to an EV/FY 25 EBITDA of 15.9 x for SKS vs 6.5 x (based on my estimates for both companies).

My point is not to say that MYG should be valued like SKS, as SKS has obviously a much higher growth profile (due to its high exposure to data centers).
However, the gap of valuation between the 2 companies looks too high to me.
It underlines once again the low valuation of MYG that we can already note, looking at its free cash flow yield (higher than 20 %).