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
|Historical stock prices|
|Current Share Price||US$33.28|
|52 Week High||US$60.84|
|52 Week Low||US$26.00|
|1 Month Change||1.46%|
|3 Month Change||7.56%|
|1 Year Change||-16.21%|
|3 Year Change||175.73%|
|5 Year Change||48.04%|
|Change since IPO||343.73%|
Recent News & Updates
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...
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.
|UCTT||US Semiconductor||US Market|
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.
|UCTT Average Weekly Movement||8.3%|
|Semiconductor Industry Average Movement||8.6%|
|Market Average Movement||7.6%|
|10% most volatile stocks in US Market||17.1%|
|10% least volatile stocks in US Market||3.1%|
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
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
|UCTT fundamental statistics|
Is UCTT overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|UCTT income statement (TTM)|
|Cost of Revenue||US$1.86b|
Last Reported Earnings
Jul 01, 2022
Next Earnings Date
|Earnings per share (EPS)||1.77|
|Net Profit Margin||3.42%|
How did UCTT perform over the long term?See historical performance and comparison
Is UCTT undervalued compared to its fair value, analyst forecasts and its price relative to the market?
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
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.
|What is UCTT's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does UCTT's PE Ratio compare to its peers?
|UCTT PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
ACLS Axcelis Technologies
UCTT Ultra Clean Holdings
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.
|Current PE Ratio||18.9x|
|Fair PE Ratio||45.1x|
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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How is Ultra Clean Holdings forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?
Future Growth Score3/6
Future Growth Score 3/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
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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How has Ultra Clean Holdings performed over the past 5 years?
Past Performance Score1/6
Past Performance Score 1/6
Growing Profit Margin
Earnings vs Industry
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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How is Ultra Clean Holdings's financial position?
Financial Health Score4/6
Financial Health Score 4/6
Short Term Liabilities
Long Term Liabilities
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 ($654.5M).
Debt to Equity History and Analysis
Debt Level: UCTT's net debt to equity ratio (13.9%) is considered satisfactory.
Reducing Debt: UCTT's debt to equity ratio has increased from 23.8% to 61% over the past 5 years.
Debt Coverage: UCTT's debt is not well covered by operating cash flow (20%).
Interest Coverage: UCTT's interest payments on its debt are well covered by EBIT (8.6x coverage).
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What is Ultra Clean Holdings's current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Cash Flow Coverage
Dividend Yield vs Market
Notable Dividend: Unable to evaluate UCTT's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate UCTT's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if UCTT's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if UCTT's dividend payments have been increasing.
Earnings Payout to Shareholders
Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: Unable to calculate sustainability of dividends as UCTT has not reported any payouts.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Jim Scholhamer (56 yo)
Mr. James P. Scholhamer, also known as Jim, has been the Chief Executive Officer at Ultra Clean Holdings Inc. since January 19, 2015 and served as its President. Mr. Scholhamer serves as the President and...
CEO Compensation Analysis
Compensation vs Market: Jim's total compensation ($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.
Experienced Management: UCTT's management team is considered experienced (2.8 years average tenure).
Experienced Board: UCTT's board of directors are considered experienced (7.4 years average tenure).
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
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Ultra Clean Holdings, Inc.'s employee growth, exchange listings and data sources
- 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
- Ultra Clean Holdings, Inc.
- 26462 Corporate Avenue
- United States
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/08/18 00:00|
|End of Day Share Price||2022/08/18 00:00|
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.