Ultra Clean (NASDAQ:UCTT) Shares Gap Down - Time to Sell?

Key Points

• Ultra Clean shares fell sharply: The stock opened at $49.50 versus a prior close of $54.70 and last traded near $50.97, well below its 50-day and 200-day moving averages.
• Analyst sentiment remains cautiously positive: Six analysts rate UCTT a Buy, one a Hold and one a Sell, producing a “Moderate Buy” consensus and a $114 average price target, despite recent target reductions and downgrades.
• Recent operating results exceeded expectations: Ultra Clean reported quarterly EPS of $1.15 versus the $0.94 consensus and revenue of $759 million, up 48.8% year over year; however, its valuation remains elevated at roughly 87 times earnings.

Ultra Clean Holdings, Inc. (NASDAQ:UCTT - Get Free Report)'s share price gapped down before the market opened on Friday. The stock had previously closed at $54.70, but opened at $49.50. Ultra Clean shares last traded at $50.9710, with a volume of 252,947 shares.

Analyst Upgrades and Downgrades

A number of equities research analysts have recently issued reports on UCTT shares. Oppenheimer upped their target price on shares of Ultra Clean from $115.00 to $150.00 and gave the company an "outperform" rating in a report on Tuesday, August 4th. TD Cowen reduced their price target on Ultra Clean from $140.00 to $100.00 and set a "buy" rating for the company in a report on Wednesday. Zacks Research downgraded Ultra Clean from a "strong-buy" rating to a "hold" rating in a research report on Friday, October 2nd. Weiss Ratings lowered Ultra Clean from a "sell (d)" rating to a "sell (d-)" rating in a research note on Friday, August 7th. Finally, Freedom Broker assumed coverage on Ultra Clean in a research note on Friday, October 9th. They issued a "buy" rating and a $127.00 price objective on the stock. Six analysts have rated the stock with a Buy rating, one has given a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and a consensus target price of $114.00.

Ultra Clean Price Performance

The company has a quick ratio of 1.25, a current ratio of 2.79 and a debt-to-equity ratio of 0.78. The company's fifty day moving average price is $67.07 and its 200 day moving average price is $74.16. The company has a market capitalization of $2.22 billion, a P/E ratio of 86.97, a PEG ratio of 0.60 and a beta of 1.86.

Ultra Clean (NASDAQ:UCTT - Get Free Report) last issued its quarterly earnings results on Tuesday, October 27th. The semiconductor company reported $1.15 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.94 by $0.21. Ultra Clean had a return on equity of 12.00% and a net margin of 1.09%. The business had revenue of $759.00 million during the quarter, compared to analysts' expectations of $727.55 million. During the same period in the previous year, the company posted $0.28 earnings per share. The firm's revenue for the quarter was up 48.8% compared to the same quarter last year. As a group, sell-side analysts forecast that Ultra Clean Holdings, Inc. will post 2.67 EPS for the current year.

Hedge Funds Weigh In On Ultra Clean

Hedge funds have recently bought and sold shares of the company. Kilter Group LLC bought a new stake in shares of Ultra Clean during the 2nd quarter worth approximately $30,000. Harbor Investment Advisory LLC bought a new position in Ultra Clean in the second quarter valued at approximately $62,000. Reyes Financial Architecture Inc. bought a new position in Ultra Clean in the third quarter valued at approximately $37,000. Global Retirement Partners LLC bought a new position in Ultra Clean in the second quarter valued at approximately $82,000. Finally, EverSource Wealth Advisors LLC raised its position in Ultra Clean by 37.3% during the first quarter. EverSource Wealth Advisors LLC now owns 721 shares of the semiconductor company's stock valued at $45,000 after purchasing an additional 196 shares in the last quarter. 96.06% of the stock is owned by institutional investors.

Ultra Clean Company Profile

Ultra Clean Holdings, Inc NASDAQ: UCTT provides critical subsystems, components and services used in the production of semiconductor and other high-technology products. The company designs and manufactures gas delivery systems, fluid delivery systems, precision-machined components, process modules and other equipment used by semiconductor capital-equipment manufacturers.

Ultra Clean also provides contract manufacturing, analytical laboratory, equipment installation, repair, refurbishment and tool-maintenance services.

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