Where Does Entegris Stand After 15% Drop and Recent Supply Chain Shifts?

If you find yourself eyeing Entegris these days, you are definitely not alone. The semiconductor materials specialist has seen its stock whip up and down lately, and that has attracted a lot of investor attention. In just the past week, Entegris lost 15.2%, but if you roll back to last month, it actually put up a 5.3% gain. Despite these short-term swings, the longer-term story is a mixed bag, with the share price down 14.0% for the year and off 22.9% over the past twelve months. Yet, over the last three and even five years, Entegris has delivered positive returns of 14.8% and 4.7% respectively.

What is driving all this turbulence? The semiconductor industry has been reacting to global supply chain shifts, policy updates, and broader market jitters. Entegris has not been immune. Still, with the latest close at $83.64, some investors wonder if the stock’s ups and downs have left it undervalued, or if caution is warranted.

Looking strictly at valuation, Entegris receives a score of 1 out of 6 using our standard undervaluation checks, signaling it only passes one metric for being undervalued. But that is only the beginning of the story. Next, we will dig into those valuation numbers and see how Entegris stacks up across different approaches. After that, I will introduce an even deeper, and arguably better, way to assess what the stock is really worth.

Entegris scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Entegris Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company’s value by projecting its future free cash flows and discounting them back to today’s dollars, reflecting the time value of money. This method is commonly used for businesses like Entegris, which generate consistent, predictable cash flows.

Currently, Entegris reports Free Cash Flow (FCF) of $243.7 million. Analyst estimates suggest FCF will grow significantly, reaching $648.5 million by 2029, with further growth extrapolated out to 2035. Notably, the ten-year projections begin with $366.1 million in 2026 and climb to more than $1.05 billion by 2035. These are only partially based on analyst estimates, with later years relying on extrapolations.

Using the 2 Stage Free Cash Flow to Equity model, the DCF calculation estimates Entegris’s intrinsic value at $55.62 per share. Given the current share price of $83.64, this suggests the stock is about 50.4% overvalued. In other words, the DCF model points to a share price that is considerably higher than what the underlying cash flows would justify at today’s value.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Entegris.

Our Discounted Cash Flow (DCF) analysis suggests Entegris may be overvalued by 50.4%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Entegris Price vs Earnings

The Price-to-Earnings (PE) ratio is a tried-and-true valuation method for companies that generate reliable profits, like Entegris. This multiple compares a company’s share price to its per-share earnings, making it especially useful for evaluating profitable businesses within mature industries such as semiconductors.

Growth prospects and risk profiles are key drivers of a “normal” or “fair” PE ratio. Higher expected growth or lower perceived risk will generally justify paying a higher multiple, while slower growth or greater risk should lower what’s reasonable. Context matters, so it is essential to look beyond just the current number.

Entegris is currently trading at a PE ratio of 42.91x. This is higher than both the semiconductor industry average of 35.30x and the peer group average of 35.80x, signaling that investors are paying a premium compared to comparable companies. However, Simply Wall St’s proprietary Fair Ratio, designed to adjust for differences in growth, risk, margins, and company size, comes in at 32.46x for Entegris. This suggests the market is valuing Entegris considerably above what its fundamentals would typically warrant. The Fair Ratio is a better benchmark than simple peer or industry averages because it incorporates additional factors like future growth rates, profit margins, and company-specific risks, offering a more tailored and holistic view of fair value.

Given Entegris’s actual PE of 42.91x versus a Fair Ratio of 32.46x, the stock appears to be overvalued using this approach.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Entegris Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a simple, approachable way to link your view of a company’s story, such as what’s driving its growth, risks, and future prospects, to a financial forecast and then to a fair value for the stock. Think of it as putting the numbers in context: rather than relying solely on traditional metrics or someone else’s price target, Narratives help you build your own evidence-based perspective about what Entegris is really worth and why.

This tool is available right now to millions of investors within the Simply Wall St Community page, where you can create, share, and review Narratives powered by live company data. When you use Narratives, you’ll see how your own fair value compares to the current market price, making it much easier to decide when to buy or sell based on your convictions. Crucially, Narratives stay relevant because they update automatically as new earnings, news, and financials emerge, so your decisions can always be based on what’s happening right now.

For example, different investors on Simply Wall St have posted Narratives on Entegris ranging from a bullish fair value of $115.00, leaning into the company’s expansion in Asia and anticipated margin growth, to a bearish estimate of $85.00, reflecting concerns about debt, operational risks, and industry headwinds. Whichever story resonates most with your beliefs, Narratives let you turn it into a transparent, actionable investment thesis.

Do you think there's more to the story for Entegris? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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