Ultra Clean Holdings Inc. Stock Upgraded (UCTT)

NEW YORK ( TheStreet) -- Ultra Clean Holdings (Nasdaq: UCTT) has been upgraded by TheStreet Ratings from hold to buy. Among the primary strengths of the company is its attractive valuation levels, considering its current price compared to earnings, book value and other measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue fell significantly faster than the industry average of 18.0%. Since the same quarter one year prior, revenues fell by 12.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • ULTRA CLEAN HOLDINGS INC's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ULTRA CLEAN HOLDINGS INC increased its bottom line by earning $1.03 versus $0.88 in the prior year. For the next year, the market is expecting a contraction of 33.0% in earnings ($0.69 versus $1.03).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market on the basis of return on equity, ULTRA CLEAN HOLDINGS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Looking at the price performance of UCTT's shares over the past 12 months, there is not much good news to report: the stock is down 28.08%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.
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Ultra Clean Holding, Inc., through its subsidiaries, designs, develops, prototypes, engineers, manufactures, tests, and supplies critical subsystems primarily to the semiconductor capital equipment industry in North America, Europe, Asia, and internationally. The company has a P/E ratio of 7.4, above the average electronics industry P/E ratio of seven and below the S&P 500 P/E ratio of 17.7. Ultra Clean has a market cap of $163.5 million and is part of the technology sector and electronics industry. Shares are up 18.7% year to date as of the close of trading on Tuesday.

You can view the full Ultra Clean Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff
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