Earnings Beat: Ultra Clean Holdings, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Ultra Clean Holdings, Inc. (NASDAQ:UCTT) just released its quarterly report and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$363m, some 6.9% above estimates, and statutory earnings per share (EPS) coming in at US$0.59, 32% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Ultra Clean Holdings

Following the latest results, Ultra Clean Holdings' six analysts are now forecasting revenues of US$1.48b in 2021. This would be a decent 12% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 105% to US$2.29. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.44b and earnings per share (EPS) of US$1.94 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice gain to earnings per share in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of US$34.83, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Ultra Clean Holdings analyst has a price target of US$42.00 per share, while the most pessimistic values it at US$26.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Ultra Clean Holdings' revenue growth will slow down substantially, with revenues next year expected to grow 12%, compared to a historical growth rate of 20% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.7% next year. Even after the forecast slowdown in growth, it seems obvious that Ultra Clean Holdings is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Ultra Clean Holdings following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Ultra Clean Holdings analysts - going out to 2022, and you can see them free on our platform here.

It is also worth noting that we have found 5 warning signs for Ultra Clean Holdings that you need to take into consideration.

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