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Ultra Clean Holdings (UCTT) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 min read

Ultra Clean Holdings (UCTT) closed the most recent trading day at $27.28, moving +0.04% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.36%. At the same time, the Dow added 0.23%, and the tech-heavy Nasdaq lost 0.1%.

Heading into today, shares of the chipmaking equipment services company had lost 18.16% over the past month, lagging the Computer and Technology sector's loss of 6.98% and the S&P 500's loss of 6.59% in that time.

Ultra Clean Holdings will be looking to display strength as it nears its next earnings release. In that report, analysts expect Ultra Clean Holdings to post earnings of $1.03 per share. This would mark year-over-year growth of 4.04%. Meanwhile, our latest consensus estimate is calling for revenue of $591.45 million, up 14.8% from the prior-year quarter.

UCTT's full-year Zacks Consensus Estimates are calling for earnings of $4.55 per share and revenue of $2.43 billion. These results would represent year-over-year changes of +8.33% and +15.68%, respectively.

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It is also important to note the recent changes to analyst estimates for Ultra Clean Holdings. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Ultra Clean Holdings currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Ultra Clean Holdings has a Forward P/E ratio of 5.99 right now. For comparison, its industry has an average Forward P/E of 10.21, which means Ultra Clean Holdings is trading at a discount to the group.

The Electronics - Manufacturing Machinery industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 155, putting it in the bottom 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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