Ultra Clean (NASDAQ:UCTT) Shares Gap Down - Should You Sell?

Key Points

• Ultra Clean shares fell sharply, opening at $80.69 versus a prior close of $86.97 and later trading near $75.27, a decline of about 9.9%.
• Despite the selloff, analysts maintain a generally positive view: the stock has an average “Buy” rating and a consensus price target of $113.40, though Weiss Ratings downgraded it to “Sell.”
• Ultra Clean exceeded its latest quarterly earnings and revenue estimates, but reported a negative net margin of 9.38%; insiders also sold more than 80,000 shares worth approximately $6.7 million during the quarter.

Ultra Clean Holdings, Inc. (NASDAQ:UCTT - Get Free Report)'s share price gapped down prior to trading on Tuesday . The stock had previously closed at $86.97, but opened at $80.69. Ultra Clean shares last traded at $75.2660, with a volume of 173,936 shares.

Wall Street Analyst Weigh In

UCTT has been the topic of a number of research reports. Zacks Research upgraded shares of Ultra Clean from a "hold" rating to a "strong-buy" rating in a report on Monday, May 25th. TD Cowen increased their price objective on Ultra Clean from $100.00 to $130.00 and gave the company a "buy" rating in a research report on Thursday, July 9th. Oppenheimer raised their price objective on Ultra Clean from $100.00 to $115.00 and gave the stock an "outperform" rating in a research note on Tuesday, June 9th. Needham & Company LLC boosted their target price on Ultra Clean from $70.00 to $92.00 and gave the stock a "buy" rating in a research report on Wednesday, April 29th. Finally, Weiss Ratings lowered Ultra Clean from a "sell (d+)" rating to a "sell (d)" rating in a research report on Friday. Two investment analysts have rated the stock with a Strong Buy rating, four have given a Buy rating and one has given a Sell rating to the company. According to data from MarketBeat, Ultra Clean presently has an average rating of "Buy" and an average target price of $113.40.

Ultra Clean Stock Down 9.9%

The firm has a 50-day moving average of $100.69 and a two-hundred day moving average of $74.89. The stock has a market capitalization of $3.51 billion, a price-to-earnings ratio of -18.34, a price-to-earnings-growth ratio of 1.24 and a beta of 1.83. The company has a quick ratio of 1.72, a current ratio of 3.07 and a debt-to-equity ratio of 0.86.

Ultra Clean (NASDAQ:UCTT - Get Free Report) last released its earnings results on Tuesday, April 28th. The semiconductor company reported $0.31 earnings per share for the quarter, beating the consensus estimate of $0.27 by $0.04. The company had revenue of $533.70 million for the quarter, compared to analysts' expectations of $525.28 million. Ultra Clean had a positive return on equity of 4.28% and a negative net margin of 9.38%.The business's revenue for the quarter was up 2.9% on a year-over-year basis. During the same quarter in the previous year, the business posted $0.28 EPS. As a group, sell-side analysts anticipate that Ultra Clean Holdings, Inc. will post 2.14 earnings per share for the current year.

Insider Buying and Selling

In other Ultra Clean news, CFO Sheri Savage sold 15,766 shares of Ultra Clean stock in a transaction on Thursday, June 4th. The shares were sold at an average price of $89.47, for a total transaction of $1,410,584.02. Following the completion of the sale, the chief financial officer owned 50,710 shares of the company's stock, valued at $4,537,023.70. This trade represents a 23.72% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, General Counsel Paul Yoonku Cho sold 944 shares of the company's stock in a transaction on Tuesday, June 2nd. The stock was sold at an average price of $89.37, for a total transaction of $84,365.28. Following the completion of the transaction, the general counsel directly owned 22,941 shares in the company, valued at $2,050,237.17. This trade represents a 3.95% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last quarter, insiders have sold 80,106 shares of company stock worth $6,734,589. Insiders own 1.80% of the company's stock.

Institutional Investors Weigh In On Ultra Clean

Institutional investors have recently made changes to their positions in the company. Regent Peak Wealth Advisors LLC bought a new position in Ultra Clean during the second quarter valued at approximately $209,000. Insight Wealth Strategies LLC bought a new stake in Ultra Clean in the second quarter worth approximately $6,768,000. Thurston Springer Miller Herd & Titak Inc. bought a new stake in Ultra Clean in the second quarter worth approximately $141,000. Assenagon Asset Management S.A. increased its stake in shares of Ultra Clean by 96.7% during the 2nd quarter. Assenagon Asset Management S.A. now owns 278,166 shares of the semiconductor company's stock worth $39,664,000 after purchasing an additional 136,732 shares during the last quarter. Finally, Harbor Investment Advisory LLC acquired a new position in shares of Ultra Clean during the 2nd quarter worth $62,000. 96.06% of the stock is currently owned by institutional investors and hedge funds.

About Ultra Clean

Ultra Clean Holdings, Inc is a global supplier of critical consumables and process tools for the semiconductor manufacturing industry. The company specializes in precision parts cleaning, chemical–mechanical planarization (CMP) slurries, surface conditioning pads, and specialty components used in wafer fabrication and advanced packaging. Ultra Clean also provides assembly and test hardware, tooling, and automated modules designed to support complex front-end and back-end processes in semiconductor fabs.

Ultra Clean's product portfolio encompasses a range of cleaning systems and consumables aimed at particle and film removal, as well as CMP slurries and pads that are engineered for uniform material removal and planarization.

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