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Ultra Clean Holdings (UCTT) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

Ultra Clean Holdings (UCTT) closed at $25 in the latest trading session, marking a -0.4% move from the prior day. This move lagged the S&P 500's daily gain of 0.39%. Elsewhere, the Dow gained 0.17%, while the tech-heavy Nasdaq added 0.34%.

Coming into today, shares of the chipmaking equipment services company had gained 7.54% in the past month. In that same time, the Computer and Technology sector gained 6.58%, while the S&P 500 gained 4.73%.

Wall Street will be looking for positivity from UCTT as it approaches its next earnings report date. The company is expected to report EPS of $0.26, up 13.04% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $270.20 million, up 4.98% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for UCTT. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. UCTT currently has a Zacks Rank of #2 (Buy).

In terms of valuation, UCTT is currently trading at a Forward P/E ratio of 17.93. Its industry sports an average Forward P/E of 22.15, so we one might conclude that UCTT is trading at a discount comparatively.

Meanwhile, UCTT's PEG ratio is currently 1.28. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Electronics - Manufacturing Machinery was holding an average PEG ratio of 9.55 at yesterday's closing price.

The Electronics - Manufacturing Machinery industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 78, which puts it in the top 31% 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.

To follow UCTT in the coming trading sessions, be sure to utilize Zacks.com.

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