Why Ultra Clean Holdings (UCTT) Stock Is Plummeting Today

NEW YORK (TheStreet) -- Ultra Clean Holdings (UCTT) shares continued to fall today, down -26.9% to $8.62, following the release of its first quarter earnings report yesterday.

The company's shares fell -15.2% in after-market trading after the company released its results on Monday.

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The semiconductor capital equipment subsystems provider posted earnings of 27 cents per share, missing analysts first quarter estimates by 3 cents.

The company also set its second quarter guidance at revenue between $128 million and $133 million and earnings between 18 cents to 21 cents a share.

Analysts were expecting second quarter revenues of $132.33 million and earnings of 26 cents per share.

TheStreet Ratings team rates ULTRA CLEAN HOLDINGS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ULTRA CLEAN HOLDINGS INC (UCTT) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 40.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.28, which illustrates the ability to avoid short-term cash problems.
  • Powered by its strong earnings growth of 650.00% and other important driving factors, this stock has surged by 104.34% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, UCTT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • ULTRA CLEAN HOLDINGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, ULTRA CLEAN HOLDINGS INC increased its bottom line by earning $0.36 versus $0.24 in the prior year. This year, the market expects an improvement in earnings ($1.05 versus $0.36).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 642.7% when compared to the same quarter one year prior, rising from -$1.17 million to $6.37 million.
  • You can view the full analysis from the report here: UCTT Ratings Report
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