Critical Review: Ultra Clean Holdings (UCTT) versus The Competition
Ultra Clean Holdings (NASDAQ: UCTT) is one of 21 public companies in the “Semiconductor Equipment & Testing” industry, but how does it compare to its rivals? We will compare Ultra Clean Holdings to related businesses based on the strength of its institutional ownership, risk, earnings, analyst recommendations, valuation, profitability and dividends.
Volatility and Risk
Ultra Clean Holdings has a beta of 1.3, suggesting that its stock price is 30% more volatile than the S&P 500. Comparatively, Ultra Clean Holdings’ rivals have a beta of 1.22, suggesting that their average stock price is 22% more volatile than the S&P 500.
This is a breakdown of current ratings and target prices for Ultra Clean Holdings and its rivals, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ultra Clean Holdings||0||2||3||1||2.83|
|Ultra Clean Holdings Competitors||58||505||1285||21||2.68|
Ultra Clean Holdings presently has a consensus price target of $30.80, suggesting a potential downside of 10.75%. As a group, “Semiconductor Equipment & Testing” companies have a potential upside of 6.91%. Given Ultra Clean Holdings’ rivals higher possible upside, analysts clearly believe Ultra Clean Holdings has less favorable growth aspects than its rivals.
Valuation and Earnings
This table compares Ultra Clean Holdings and its rivals top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Ultra Clean Holdings||$753.55 million||$74.66 million||24.83|
|Ultra Clean Holdings Competitors||$1.64 billion||$379.05 million||11.11|
Ultra Clean Holdings’ rivals have higher revenue and earnings than Ultra Clean Holdings. Ultra Clean Holdings is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.
This table compares Ultra Clean Holdings and its rivals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ultra Clean Holdings||6.25%||24.16%||13.62%|
|Ultra Clean Holdings Competitors||6.10%||12.31%||7.17%|
Institutional and Insider Ownership
77.6% of Ultra Clean Holdings shares are held by institutional investors. Comparatively, 79.7% of shares of all “Semiconductor Equipment & Testing” companies are held by institutional investors. 2.6% of Ultra Clean Holdings shares are held by insiders. Comparatively, 13.9% of shares of all “Semiconductor Equipment & Testing” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Ultra Clean Holdings beats its rivals on 7 of the 13 factors compared.
About Ultra Clean Holdings
Ultra Clean Holdings, Inc. is engaged in the design, engineering and manufacture of production tools, modules and subsystems the semiconductor capital equipment industry. The Company’s products include precision robotic solutions; gas delivery systems; a range of industrial and automation production equipment products; subsystems that includes wafer cleaning sub-systems, chemical delivery modules, top-plate assemblies, frame assemblies, and process modules. The Company offers its products for the semiconductor capital equipment and equipment industry segments. It also sells to the consumer, medical, energy, industrial, flat panel and research equipment industries. The Company is focused on providing specialized engineering and manufacturing solutions for these applications. It provides its original equipment manufacturing (OEM) customers an outsourced solution for the development, design, component sourcing, prototyping, engineering, manufacturing and testing of various systems.
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