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UCTT

Ultra Clean Holdings NasdaqGS:UCTT Stock Report

Last Price

US$33.28

Market Cap

US$1.5b

7D

1.2%

1Y

-16.2%

Updated

18 Aug, 2022

Data

Company Financials +
UCTT fundamental analysis
Snowflake Score
Valuation2/6
Future Growth3/6
Past Performance1/6
Financial Health4/6
Dividends0/6

UCTT Stock Overview

Ultra Clean Holdings, Inc. develops and supplies critical subsystems, components and parts, and ultra-high purity cleaning and analytical services for the semiconductor industry in the United States and internationally.

Ultra Clean Holdings Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Ultra Clean Holdings
Historical stock prices
Current Share PriceUS$33.28
52 Week HighUS$60.84
52 Week LowUS$26.00
Beta1.96
1 Month Change1.46%
3 Month Change7.56%
1 Year Change-16.21%
3 Year Change175.73%
5 Year Change48.04%
Change since IPO343.73%

Recent News & Updates

Aug 06
Is Now The Time To Look At Buying Ultra Clean Holdings, Inc. (NASDAQ:UCTT)?

Is Now The Time To Look At Buying Ultra Clean Holdings, Inc. (NASDAQ:UCTT)?

Ultra Clean Holdings, Inc. ( NASDAQ:UCTT ), might not be a large cap stock, but it led the NASDAQGS gainers with a...

Aug 03

Ultra Clean Holdings Is Sitting On The Fence

UCTT was in the midst of a powerful rally, but downbeat guidance trumped better-than-expected earnings to bring the rally to a halt. The stock is in position for a breakout, but it will have to come soon or UCTT is heading lower if the charts have anything to say. Multiples are lower than they have been in the recent past, which might be appealing to those who are looking for a deal. There are some arguments in favor of long UCTT, but they are outweighed by stronger arguments against it. Ultra Clean Holdings, Inc. (UCTT) has been on somewhat of a roll lately. The stock trended lower for pretty much the entire first half of 2022, but it did much better in the month of July. The stock even came close to completing what would have been a breakout at the end of the month, but the effort failed after the release of the most recent quarterly report caused the stock to drop. Why will be covered next. Why the Q2 report got a poor reception from the market The Q2 report was not all bad. It actually came with a number of positives. For instance, revenue and non-GAAP EPS exceeded consensus estimates. Q2 revenue increased by 18% YoY to $608.7M, coming close to matching the record high. UCTT finished Q2 with a net loss of $25M or $0.56 per share in terms of GAAP and a net income of $47.4M or $1.04 per share in terms of non-GAAP, which represents an increase of 5% YoY. The table below shows the numbers for Q2 FY2022. Note that there was a charge of $56M or $1.24 per share in Q2 due to the divestiture of several businesses. This pushed the GAAP numbers into the red, but it is excluded in the non-GAAP numbers. Non-GAAP earnings growth benefited from a lower tax rate of 15.2% in Q2 FY2022, down from 17.6% in Q1 FY2022 and 16.4% in Q2 FY2021. The non-GAAP weighted-average share count increased to 45.64M in Q2 FY2022, up from 44.25M in Q1 FY2022 and 45.59M in Q2 FY2021. Cash and equivalent was $421M at the end of Q2, down from $466M at the start of FY2022. (GAAP) Q2 FY2022 Q1 FY2022 Q2 FY2021 QoQ YoY Revenue $608.697M $564.144M $515.200M 7.90% 18.15% Gross margin 19.4% 20.2% 19.4% (80bps) - Operating margin (0.9%) 8.1% 6.2% (900bps) (710bps) Income (loss) from operations ($5.511M) $45.711M $31.947M - - Net income (loss) attributable to UCTT ($25.093M) $27.930M $17.098M - - EPS ($0.56) $0.61 $0.39 - - (Non-GAAP) Revenue $608.697M $564.144M $515.200M 7.90% 18.15% Gross margin 20.3% 20.5% 21.2% (20bps) (90bps) Operating margin 11.1% 10.9% 11.7% 20bps (60bps) Income from operations $67.390M $61.633M $60.430M 9.34% 11.52% Net income $47.415M $43.325M $43.678M 9.44% 8.56% EPS $1.04 $0.95 $0.99 9.47% 5.05% Source: UCTT Form 8-K However, Q3 guidance was a different story as it was worse than expected. Consensus estimates expected non-GAAP EPS of $1.23, but the actual number was significantly less. Guidance calls for Q3 FY2022 revenue of $585-645M, an increase of 11.1% YoY at the midpoint. The forecast expects GAAP EPS of $0.32-0.55, a decline of 37.9% YoY at the midpoint, and non-GAAP EPS of $0.94-1.18, a decline of 0.9% YoY at the midpoint. The wide range in guidance is a reflection of the high degree of uncertainty UCTT is faced with, especially with supply chain disruptions fairly common these days. Q3 FY2022 (guidance) Q3 FY2021 YoY Revenue $585-645M $553.7M 5.65-16.49% GAAP EPS $0.32-0.55 $0.70 (21.43-54.29%) Non-GAAP EPS $0.94-1.18 $1.07 (12.15)-10.28% Guidance did not extend into Q4, but management added some color as to the rest of FY2022. UCTT expects growth to continue as demand remains strong. From the Q2 earnings call: “For the second half of this year, we reiterate our belief that 2022 will be another year of growth for the WFE market and UCT. Broad-based rational spending supporting leading and trailing edge devices continues to keep demand elevated. While some customer order flows and delivery schedules have been adjusted into the following quarters to align with ongoing supply chain constraints and capacity limitations, we have not seen any significant cancellations.” A transcript of the Q2 FY2022 earnings call can be found here. Management is upbeat about the outlook further ahead. While UCTT acknowledges there is weakness in certain segments of the semiconductor market, other segments are holding strong. “Our outlook for 2023 remains favorable. While there are signs of potential weakness in PC, low-end smartphones and some consumer electronics, those are being offset by strong demand in the high-performance computing, IoT, robotics and automotive sectors. Today, the chip industry powers most aspects of our economy, so it's far less vulnerable to a single retail end market, and so is UCT.” These comments from UCTT are reassuring in light of recent worries about the health of the semiconductor market. There are increasing reports suggesting demand for semiconductor chips is starting to crack, which would undoubtedly have negative ramifications for suppliers of equipment needed to manufacture those chips. According to the most recent Form 10-K, UCTT derived 64% of FY2021 sales from Applied Materials (AMAT) and Lam Research (LRCX), two of the largest suppliers of semiconductor manufacturing equipment. UCTT is thus very much dependent on a healthy semiconductor market to grow sales and profits. UCTT will need strength in some market segments to keep offsetting weakness elsewhere. Nevertheless, it’s worth mentioning that a number of big-name semiconductor companies have reported falling demand for certain types of semiconductors, specifically those used in smartphones and PCs. For instance, Intel (INTC) and Qualcomm (QCOM) have both issued pessimistic guidance recently, citing weakness in demand for PCs and smartphones, respectively. Suppliers of semiconductor manufacturing equipment have benefited greatly from plans to expand the production of semiconductor chips. In fact, the bull case for UCTT rests on the assumption that this expansion will continue unabated. However, the weakness in demand for products like PCs and smartphones have convinced some manufacturers to make changes to these plans. For instance, SK Hynix has postponed its planned $3.3B expansion of a memory chip fab. If more fab projects are delayed or even canceled, less semiconductor equipment will be needed from the likes of AMAT and LRCX. If both see demand go down, UCTT will be affected as well since most of its sales is derived from these two companies. The stock gets rejected The stock fell 7% in response to the latest guidance and was even down as much as 12% at one point. The drop came in the aftermath of a powerful rally that saw the stock gain 34% in the weeks following the low on July 1 and prior to the release of the Q2 report. The rally was in part helped along with the impending passing of the CHIPS Act in the U.S. Congress. However, the latest report seems to have put an end to the rally, at least temporarily. The chart below shows how the stock has rallied in recent weeks after falling for most of 2022.

Shareholder Returns

UCTTUS SemiconductorUS Market
7D1.2%2.4%1.4%
1Y-16.2%-3.2%-8.4%

Return vs Industry: UCTT underperformed the US Semiconductor industry which returned -4.2% over the past year.

Return vs Market: UCTT underperformed the US Market which returned -9% over the past year.

Price Volatility

Is UCTT's price volatile compared to industry and market?
UCTT volatility
UCTT Average Weekly Movement8.3%
Semiconductor Industry Average Movement8.6%
Market Average Movement7.6%
10% most volatile stocks in US Market17.1%
10% least volatile stocks in US Market3.1%

Stable Share Price: UCTT is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: UCTT's weekly volatility (8%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19915,860Jim Scholhamerhttps://www.uct.com

Ultra Clean Holdings, Inc. develops and supplies critical subsystems, components and parts, and ultra-high purity cleaning and analytical services for the semiconductor industry in the United States and internationally. The company provides ultra-clean valves, high purity connectors, industrial process connectors and valves, pneumatic actuators, manifolds and safety solutions, hoses, pressure gauges, and gas line and component heaters; chemical delivery modules that deliver gases and reactive chemicals in a liquid or gaseous form from a centralized subsystem to the reaction chamber; and gas delivery systems, such as weldments, filters, mass flow controllers, regulators, pressure transducers and valves, component heaters, and an integrated electronic and/or pneumatic control system. It also offers various industrial and automation production equipment; fluid delivery systems consist of one or more chemical delivery units, including PFA tubing, filters, flow controllers, regulators, component heaters, and an integrated electronic and/or pneumatic control system; precision robotic systems; top-plate assemblies; frame assemblies; process modules, a subsystem of semiconductor manufacturing tools that process integrated circuits onto wafers; and other high-level assemblies.

Ultra Clean Holdings Fundamentals Summary

How do Ultra Clean Holdings's earnings and revenue compare to its market cap?
UCTT fundamental statistics
Market CapUS$1.51b
Earnings (TTM)US$80.20m
Revenue (TTM)US$2.34b

18.9x

P/E Ratio

0.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
UCTT income statement (TTM)
RevenueUS$2.34b
Cost of RevenueUS$1.86b
Gross ProfitUS$485.50m
Other ExpensesUS$405.30m
EarningsUS$80.20m

Last Reported Earnings

Jul 01, 2022

Next Earnings Date

n/a

Earnings per share (EPS)1.77
Gross Margin20.73%
Net Profit Margin3.42%
Debt/Equity Ratio61.0%

How did UCTT perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is UCTT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for UCTT?

Other financial metrics that can be useful for relative valuation.

UCTT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.8x
Enterprise Value/EBITDA5.8x
PEG Ratio0.4x

Price to Earnings Ratio vs Peers

How does UCTT's PE Ratio compare to its peers?

UCTT PE Ratio vs Peers
The above table shows the PE ratio for UCTT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average17.1x
CAMT Camtek
19.6x8.0%US$1.4b
COHU Cohu
15.1x-9.4%US$1.4b
ACLS Axcelis Technologies
16.7x7.1%US$2.5b
PLAB Photronics
17.2x24.0%US$1.5b
UCTT Ultra Clean Holdings
18.9x53.2%US$1.5b

Price-To-Earnings vs Peers: UCTT is expensive based on its Price-To-Earnings Ratio (18.9x) compared to the peer average (17.1x).


Price to Earnings Ratio vs Industry

How does UCTT's PE Ratio compare vs other companies in the US Semiconductor Industry?

Price-To-Earnings vs Industry: UCTT is good value based on its Price-To-Earnings Ratio (18.9x) compared to the US Semiconductor industry average (19.3x)


Price to Earnings Ratio vs Fair Ratio

What is UCTT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

UCTT PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio18.9x
Fair PE Ratio45.1x

Price-To-Earnings vs Fair Ratio: UCTT is good value based on its Price-To-Earnings Ratio (18.9x) compared to the estimated Fair Price-To-Earnings Ratio (45.1x).


Share Price vs Fair Value

What is the Fair Price of UCTT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: UCTT ($33.28) is trading above our estimate of fair value ($10.66)

Significantly Below Fair Value: UCTT is trading above our estimate of fair value.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.


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Future Growth

How is Ultra Clean Holdings forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


53.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: UCTT's forecast earnings growth (53.2% per year) is above the savings rate (1.9%).

Earnings vs Market: UCTT's earnings (53.2% per year) are forecast to grow faster than the US market (14.4% per year).

High Growth Earnings: UCTT's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: UCTT's revenue (2.6% per year) is forecast to grow slower than the US market (7.8% per year).

High Growth Revenue: UCTT's revenue (2.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if UCTT's Return on Equity is forecast to be high in 3 years time


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Past Performance

How has Ultra Clean Holdings performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


16.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: UCTT has a large one-off loss of $83.2M impacting its July 1 2022 financial results.

Growing Profit Margin: UCTT's current net profit margins (3.4%) are lower than last year (5.3%).


Past Earnings Growth Analysis

Earnings Trend: UCTT's earnings have grown by 16.1% per year over the past 5 years.

Accelerating Growth: UCTT's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: UCTT had negative earnings growth (-10.4%) over the past year, making it difficult to compare to the Semiconductor industry average (56.1%).


Return on Equity

High ROE: UCTT's Return on Equity (10.3%) is considered low.


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Financial Health

How is Ultra Clean Holdings's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: UCTT's short term assets ($1.1B) exceed its short term liabilities ($395.4M).

Long Term Liabilities: UCTT's short term assets ($1.1B) exceed its long term liabilities ($654.5M).


Debt to Equity History and Analysis

Debt Level: UCTT's net debt to equity ratio (13.9%) is considered satisfactory.

Reducing Debt: UCTT's debt to equity ratio has increased from 23.8% to 61% over the past 5 years.

Debt Coverage: UCTT's debt is not well covered by operating cash flow (20%).

Interest Coverage: UCTT's interest payments on its debt are well covered by EBIT (8.6x coverage).


Balance Sheet


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Dividend

What is Ultra Clean Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate UCTT's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate UCTT's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if UCTT's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if UCTT's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as UCTT has not reported any payouts.


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Management

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure


CEO

Jim Scholhamer (56 yo)

7.58yrs

Tenure

US$5,201,766

Compensation

Mr. James P. Scholhamer, also known as Jim, has been the Chief Executive Officer at Ultra Clean Holdings Inc. since January 19, 2015 and served as its President. Mr. Scholhamer serves as the President and...


CEO Compensation Analysis

Compensation vs Market: Jim's total compensation ($USD5.20M) is about average for companies of similar size in the US market ($USD5.41M).

Compensation vs Earnings: Jim's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

Experienced Management: UCTT's management team is considered experienced (2.8 years average tenure).


Board Members

Experienced Board: UCTT's board of directors are considered experienced (7.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Ultra Clean Holdings, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Ultra Clean Holdings, Inc.
  • Ticker: UCTT
  • Exchange: NasdaqGS
  • Founded: 1991
  • Industry: Semiconductor Equipment
  • Sector: Semiconductors
  • Implied Market Cap: US$1.512b
  • Shares outstanding: 45.43m
  • Website: https://www.uct.com

Number of Employees


Location

  • Ultra Clean Holdings, Inc.
  • 26462 Corporate Avenue
  • Hayward
  • California
  • 94545
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/18 00:00
End of Day Share Price2022/08/18 00:00
Earnings2022/07/01
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.