As of June 15, 2025, Ultra Clean Holdings Inc's estimated intrinsic value ranges from $8.66 to $89.59 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $89.59 | +350.9% |
| Discounted Cash Flow (5Y) | $57.81 | +191.0% |
| Dividend Discount Model (Multi-Stage) | $34.59 | +74.1% |
| Dividend Discount Model (Stable) | $8.66 | -56.4% |
| Earnings Power Value | $11.28 | -43.2% |
Is Ultra Clean Holdings Inc (UCTT) undervalued or overvalued?
With the current market price at $19.87, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Ultra Clean Holdings Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.04 | 1.58 |
| Cost of equity | 8.7% | 13.7% |
| Cost of debt | 7.0% | 7.6% |
| Tax rate | 33.5% | 45.2% |
| Debt/Equity ratio | 0.55 | 0.55 |
| After-tax WACC | 7.2% | 10.3% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $58 | $2,774M | 82.2% |
| 10-Year Growth | $90 | $4,208M | 68.4% |
| 5-Year EBITDA | $85 | $3,992M | 87.7% |
| 10-Year EBITDA | $105 | $4,918M | 73.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $57M |
| Discount Rate (WACC) | 10.3% - 7.2% |
| Enterprise Value | $555M - $791M |
| Net Debt | $163M |
| Equity Value | $391M - $627M |
| Outstanding Shares | 45M |
| Fair Value | $9 - $14 |
| Selected Fair Value | $11.28 |
| Metric | Value |
|---|---|
| Market Capitalization | $897M |
| Enterprise Value | $1060M |
| Trailing P/E | 31.93 |
| Forward P/E | 14.19 |
| Trailing EV/EBITDA | 10.70 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.55 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $26.88 |
| Discounted Cash Flow (5Y) | 25% | $14.45 |
| Dividend Discount Model (Multi-Stage) | 20% | $6.92 |
| Dividend Discount Model (Stable) | 15% | $1.30 |
| Earnings Power Value | 10% | $1.13 |
| Weighted Average | 100% | $50.67 |
Based on our comprehensive valuation analysis, Ultra Clean Holdings Inc's weighted average intrinsic value is $50.67, which is approximately 155.0% above the current market price of $19.87.
Key investment considerations:
Given these factors, we believe Ultra Clean Holdings Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.