Ultra Clean (UCTT) Stock Forecast & Price Target

Ultra Clean Holdings Inc. has demonstrated significant growth under its current leadership, with its annual revenue run rate increasing from approximately $500 million to $2 billion, which surpasses the tripling of the wafer fabrication equipment (WFE) market during the same timeframe. The company anticipates a revenue growth rate in the high single digits for 2025, driven by strong performance in its subsystems and services segments, which cater to high-demand markets such as memory, foundry, and logic equipment. Furthermore, UCTT is expected to exceed a gross margin of 19% in 2025, bolstered by its diversification in high-margin service offerings and the potential expansion of supplier diversity in its supply chain.

Ultra Clean Holdings Inc. is facing a negative outlook primarily due to a substantial reduction in its projected earnings per share (EPS) for 2026, revised down from $3.62 to $2.82. This downward adjustment is significantly influenced by deteriorating demand in China, where the company reported a sequential revenue decline from $57 million in 3Q24 to $44 million in 4Q24, exacerbated by anticipated major declines in its Chinese semiconductor business. Additionally, expectations of a 70% quarter-over-quarter revenue drop in the Chinese market, alongside broader pressures on semiconductor companies in the region, indicate that Ultra Clean Holdings may struggle to regain growth in this critical segment.