This semiconductor cleaning company earned $0.73 per share last quarter, beating analysts’ estimates by eight cents.
Ultra Clean Holdings, Inc. (UCTT)
From Upside
Ultra Clean Holdings shares look timely, reflected by their high Quadrix scores for Momentum (91), Earnings Estimates (93), and Performance (77). For the 12 months ended September, per-share profits nearly tripled, while sales jumped 27%.
That pace of recent operating momentum may be unsustainable, but Ultra Clean should have a long runway of growth ahead. With industrywide semiconductor-equipment sales projected to rise 15% in 2020, bellwethers Applied Materials and Lam Research appear increasingly bullish on the industry’s 2021 prospects, noting that customer optimism should support more growth. Analysts expect Ultra Clean to increase per-share profits 8% in 2021 on 9% higher revenue.
Despite surging 36% over the past three months, Ultra Clean shares still look attractively valued from virtually every angle. With a Value score of 71, the stock trades at 13 times trailing earnings, well below its industry median of 25. At 10 times estimated 2021 earnings, the stock offers a 44% discount to industry peers. If its trailing P/E rises to 16 and Ultra Clean merely meets the low 2021 profit estimate of $2.77 per share, the shares would rally to $44 over the next 14 months. Ultra Clean is a Best Buy.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, January 4, 2021