UCTT
Ultra Clean Holdings, Inc.
$45.32
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 444.7% above fair value
You pay
$45.32
Bear
$6.24
Fair
$8.32
Bull
$10.40
Bear
$6.24
-86.2%
$0.52 × 12x
Fair
$8.32
-81.6%
$0.52 × 16x
Bull
$10.40
-77.1%
$0.52 × 20x
Adjust Assumptions
16.0x
0.52$
Key Value Driver
Through-cycle normalized EPS ($0.52)
Implied Market Multiple
87.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (12 analysts)
$122.33
Divergence from AlphaVal
93%
Summary
Using 7-year normalized EPS of $0.52 at a 16x cycle multiple, the base-case value is $8.32 per share. P/TBV cross-check: 4.7x.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
Price-to-book value of 4.7x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $122.33 (from 12 analysts). Our estimate is 93% below the consensus -- consider that gap carefully.
This stock is 69% below its 52-week high, with weak or declining earnings. That combination often signals real trouble, even though the valuation below is based on other fundamentals.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing