U.S. Markets close in 5 hrs 58 mins

Investors Advised to Avoid Ultratech, Inc.

Zacks Equity Research

Zacks Investment Research downgraded Ultratech, Inc. (UTEK) to a Zacks Rank #5 (Strong Sell) on Mar 1, 2014. Going by the Zacks model, the companies holding a Zacks Rank #5 have strong chances of performing worse than the broader market.

Why the Downgrade?

Ultratech, Inc. reported disappointing results for fourth-quarter 2013 on Jan 30, 2014. It reported a loss per share of 51 cents as against earnings per share of 48 cents in the year-ago quarter. Also, the bottom-line loss was wider than the Zacks Consensus Estimate of a loss of 30 cents.

Net sales in the quarter plummeted to $24.0 million from $65.6 million in the fourth-quarter 2012. The company suffered due to conservative spending by its customers that led to a decline in revenues from Systems and Parts segments. Gross margin was 8.4%, down from 56.7% recorded in the year-ago quarter.      

Fourth-quarter 2013 results triggered downward revisions in earnings estimates for Ultratech, Inc. In the last 60 days, the Zacks Consensus Estimate has fallen 57.1% to 33 cents for 2014, while it worsened from a loss per share of 15 cents to 21 cents for first-quarter 2014.

Lowered earnings estimates along with a negative 224.3% average earnings surprise have made us suspicious about Ultratech, Inc.’s performance in the coming quarters.
Other Stocks to Consider

Ultratech, Inc. is a $713 million company operating in the semiconductor equipment and materials industry. Some better-ranked stocks in the same industry include Ultra Clean Holdings Inc. (UCTT), Ambarella, Inc. (AMBA) and Amtech Systems Inc. (ASYS), all of which carry a Zacks Rank #2 (Buy).

Read the Full Research Report on UCTT
Read the Full Research Report on ASYS
Read the Full Research Report on UTEK
Read the Full Research Report on AMBA

Zacks Investment Research