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Ichor Holdings (ICHR)
NASDAQ:ICHR
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Ichor Holdings
(NASDAQ:ICHR)
50Neutral
Positive Factors
NAND Market Demand
Improved visibility on NAND market demand is seen as a positive factor for ICHR.
Revenue Growth
Revenue growth is accelerating, outpacing analyst and consensus expectations.
Negative Factors
Gross Margin and Earnings Shortfall
Costs are accelerating, contributing to a Q4 gross margin and earnings per share shortfall.
Gross Margin Pressures
Near-term gross margin pressures from inventory charges and higher labor costs could weigh on ICHR's financial results.
Ichor Holdings (ICHR) vs. S&P 500 (SPY)
Market Cap
$727.63M
Dividend YieldN/A
Average Volume (3M)375.45K
Price to Earnings (P/E)―
Beta (1Y)2.26
Revenue Growth4.68%
EPS Growth55.72%
CountryUS
Employees1,820
SectorTechnology
Sector Strength57
IndustrySemiconductors
Share Statistics
EPS (TTM)-0.65
Shares Outstanding34,112,965
10 Day Avg. Volume427,137
30 Day Avg. Volume375,450
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.07
Price to Cash Flow (P/CF)-90.90
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$39.67Price Target Upside85.98% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Ichor Holdings Business Overview & Revenue Model
Company DescriptionIchor Holdings, Ltd. is a leading provider of critical fluid delivery subsystems and components for semiconductor capital equipment. The company operates predominantly in the semiconductor equipment sector, designing and manufacturing gas and chemical delivery systems, which are integral to the manufacturing process of semiconductor chips. Ichor's products are used by major semiconductor equipment manufacturers, supporting the global technology and electronics industries.
How the Company Makes MoneyIchor Holdings generates revenue primarily through the sale of its fluid delivery subsystems and components to semiconductor equipment manufacturers. These products are essential in the semiconductor fabrication process, as they ensure precise and reliable delivery of critical gases and chemicals. Ichor's revenue model is largely based on long-term partnerships and contracts with leading semiconductor equipment companies, benefiting from the consistent demand for advanced semiconductor fabrication technology. Additionally, the company invests in research and development to expand its product offerings and maintain a competitive edge in the market.
Ichor Holdings Financial Statement Overview
Summary
Ichor Holdings faces profitability challenges with negative net income and EBIT, impacting its financial performance. While revenue shows modest growth, the company is effectively managing its debt and improving cash flow generation. Overall, the financial stability is supported by a strong equity base, though profitability remains a concern.Income Statement
Ichor Holdings shows declining profitability with a negative EBIT and net income in the latest TTM period, indicating operational challenges. The gross profit margin stands at 11.67%, and net profit margin is negative, reflecting ongoing issues in cost management and revenue generation. However, there is a slight revenue growth of 4.68% from the previous year, which is a positive sign.45
Neutral
Balance Sheet
The company maintains a solid equity position with an equity ratio of 70.15%. The debt-to-equity ratio has improved due to reduced total debt, indicating better leverage management. However, the return on equity is negative due to negative net income, highlighting profitability concerns.60
Neutral
Cash Flow
Operating cash flow is positive, and free cash flow is growing, indicating improvements in cash management. The operating cash flow to net income ratio is negative due to the net loss, but the free cash flow to net income ratio is positive, suggesting potential for future profitability.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 849.04M | 811.12M | 1.28B | 1.10B | 914.24M | Gross Profit |
| 103.33M | 103.40M | 211.86M | 177.48M | 124.89M | EBIT |
| -7.64M | -10.89M | 85.82M | 81.01M | 41.55M | EBITDA |
| -7.64M | 22.88M | 121.49M | 106.20M | 65.28M | Net Income Common Stockholders |
| -20.82M | -42.98M | 72.80M | 70.90M | 33.28M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 108.67M | 79.95M | 86.47M | 75.50M | 252.90M | Total Assets |
| 995.56M | 938.48M | 1.08B | 1.02B | 774.17M | Total Debt |
| 53.18M | 286.33M | 341.74M | 322.74M | 210.67M | Net Debt |
| -55.49M | 206.38M | 255.27M | 247.25M | -42.23M | Total Liabilities |
| 297.23M | 373.80M | 496.25M | 520.16M | 362.48M | Stockholders Equity |
| 698.34M | 564.68M | 587.50M | 500.71M | 411.69M |
| Cash Flow | Free Cash Flow | |||
| 10.24M | 42.14M | 2.02M | -5.31M | 27.96M | Operating Cash Flow |
| 27.88M | 57.63M | 31.45M | 15.53M | 38.26M | Investing Cash Flow |
| -17.64M | -15.50M | -28.93M | -289.85M | -14.60M | Financing Cash Flow |
| 18.47M | -48.65M | 8.46M | 96.91M | 168.62M |
Ichor Holdings Technical Analysis
Neutral
21.33
Price Trends
24.97
Negative
28.20
Negative
29.58
Negative
Market Momentum
-1.54
Negative
51.30
Neutral
86.92
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ICHR, the sentiment is Neutral. The current price of 21.33 is above the 20-day moving average (MA) of 19.19, below the 50-day MA of 24.97, and below the 200-day MA of 29.58, indicating a neutral trend. The MACD of -1.54 indicates Negative momentum. The RSI at 51.30 is Neutral, neither overbought nor oversold. The STOCH value of 86.92 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ICHR.
Ichor Holdings Risk Analysis
Ichor Holdings disclosed 36 risk factors in its most recent earnings report. Ichor Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ichor Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $580.88M | 13.16 | 5.63% | 5.30% | 3.24% | -26.85% | |
62 Neutral | $1.00B | 42.81 | 2.77% | ― | 20.92% | ― | |
59 Neutral | $10.74B | 10.21 | -6.69% | 3.04% | 7.44% | -10.92% | |
50 Neutral | $727.63M | ― | -3.30% | ― | 4.68% | 55.72% | |
48 Neutral | $785.60M | ― | -7.73% | ― | -36.86% | -351.11% | |
47 Neutral | $571.53M | ― | -2.57% | ― | 4.12% | -29.74% | |
41 Neutral | $695.10M | ― | -84.12% | ― | 14.57% | -139.27% |
* Technology Sector Average
Performance Comparison
ICHR
Ichor Holdings
21.33
-18.63
-46.62%
AOSL
Alpha and Omega
19.43
-3.03
-13.49%
IMOS
ChipMOS Technologies
16.09
-11.68
-42.06%
COHU
Cohu
16.88
-14.19
-45.67%
UCTT
Ultra Clean Holdings
22.49
-20.18
-47.29%
AAOI
Applied Optoelectronics
12.56
2.34
22.90%
Ichor Holdings Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -24.39% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook with strong revenue growth and demand, particularly in proprietary products and strategic market segments. However, challenges remain with gross margin pressures and increased operating expenses.Highlights
Record Revenue Growth in Q4
Q4 revenue reached $233 million, exceeding expectations and marking a 10% sequential increase. Annual revenue for 2024 was $849 million, up 5% from 2023.
Strong Demand and Market Outlook
Customer demand strengthened in Q4, with significant growth anticipated in Etch and CVD applications, advanced logic, DRAM markets, and a recovery in NAND technology investments.
Proprietary Product Qualifications
Ichor successfully qualified high-purity valves with a second customer and is progressing with a third. Proprietary fittings and substrates have also been qualified by major customers.
Debt Reduction
Total debt reduced to $129 million at year-end, down from $250 million a year ago, with a net-debt coverage ratio decline to 1.6 times.
Lowlights
Gross Margin Decline
Gross margin fell to 12% in Q4, below expectations by 300 basis points, primarily due to higher direct labor costs and inventory charges.
Higher Operating Expenses Projected
Q1 operating expenses are projected to increase to $23.5 million, partly due to seasonal payroll taxes and variable compensation costs.
Inventory and Labor Cost Headwinds
Higher-than-expected inventory charges and direct labor costs impacted Q4 results, with some residual impacts expected in Q1 of 2025.
Company Guidance
During the Ichor Fourth Quarter and Fiscal Year 2024 Earnings Conference Call, the company provided guidance that reflected optimism for 2025, with expected revenue in the range of $235 million to $255 million for Q1. Gross margins are projected to improve, reaching 14% to 15% in Q1, with expectations of exceeding 16% for the full year. The company highlighted a 25% to 30% flow-through, with contributions from new proprietary products such as high-purity valves and next-generation gas panels set to drive margin expansion. Operating expenses for Q1 are anticipated to be around $23.5 million, with net interest expense for the year expected to be approximately $6 million. The non-GAAP effective tax rate for 2025 is projected at 12.5%, with Q1 EPS expected between $0.20 and $0.32. Overall, the company is preparing for a strong growth year, driven by increasing demand in etch and deposition applications, and a favorable mix in wafer fab equipment demand.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.