Stock Worth Buying: Ultra Clean Holdings - Analyst Blog


Zacks Investment Research upgraded Ultra Clean Holdings Inc. ( UCTT ) to a Zacks Rank #1 (Strong Buy) on Mar 11, 2014. Going by the Zacks model, the companies holding a Zacks Rank #1 have strong chances of performing better than the broader market.

Why the Upgrade?

Ultra Clean Holdings reported impressive fourth-quarter 2013 results on Feb 18, 2014. Since then, shares of the company have spiraled up 20.3%. Earnings per share in the quarter were 26 cents, surpassing the Zacks Consensus Estimate of 23 cents 13.0%.

Revenues in the quarter increased 40.2% year over year to $126.0 million. Of total revenue, roughly 93.7% was Semiconductor revenue. Revenue generated from international operations was 29.1%. Gross margin increased 430 basis points year over year to 17.1%.      

For first-quarter 2014, Ultra Clean Holdings anticipates revenues to be within the $135-$140 million range and adjusted earnings per share to be within 28-31 cents. At mid-points, the revenue guidance reflects a sequential increase of 9.1% while the earnings guidance is a 13.5% increase over the previous quarter.

Fourth-quarter 2013 results triggered upward revisions in earnings estimates for Ultra Clean Holdings. In the last 30 days, the Zacks Consensus Estimate has increased 33.8% to $1.07 for 2014. The estimate also reflects year-over-year growth of 102.4%. Earnings growth for the next 5 years is predicted to be 11.5%.

Earnings growth rates as well as a positive average earnings surprise of 11.8% have made us optimistic about Ultra Clean Holdings' performance in the coming quarters.

Other Stocks to Consider

Ultra Clean Holdings is a $39.9 million company operating in the semiconductor industry. Other stocks worth considering in the industry include Tessera Technologies Inc. ( TSRA ), Canadian Solar Inc. ( CSIQ ) and SolarCity Corp. ( SCTY ). While Tessera Technologies and Canadian Solar carry a Zacks Rank #1 (Strong Buy), SolarCity Corporation holds a Zacks Rank #2 (Buy).

CANADIAN SOLAR (CSIQ): Free Stock Analysis Report

SOLARCITY CORP (SCTY): Free Stock Analysis Report

TESSERA TEC INC (TSRA): Free Stock Analysis Report

ULTRA CLEAN HLD (UCTT): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: CSIQ , SCTY , TSRA , UCTT

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