The Undervalued Ichor Holdings Is Set to Soar
Ichor Holdings (NASDAQ:ICHR), a semiconductor equipment & materials company, is relatively new in the technology industry. The company started trading on the NASDAQ in the beginning of FY2017. However, its financial performance and future fundamentals have raised investor’s confidence. Its stock price rallied almost 163% and hit the highest level of $32 a share in last October. The ICHR stock price soothed since hitting the 52-week high, currently trading around $26 a share.
After the latest selloff, Ichor stock price looks undervalued trading at 17 times to earnings and 1.1 times to sales ratio, compared to the industry average 23 and 4.1 times, respectively. The Ichor’s share price also looks underpriced considering the book ratio of 3.5, relative to the industry average of 6 times.
Therefore, the dip in Ichor share price could be an attractive buying opportunity for investors. In the latest quarter, the company’s revenue increased 53% year over year to $164 million, while net income from continuing operations soared 86%. Ichor Holdings expects to generate revenue of $174 million in the final quarter and earnings are expected to stand around $0.71 per share.
Its financial numbers and earnings potential are significantly strong, representing strong upside in the days ahead. Several fund managers and insiders are showing their confidence in Ichor’s future fundamentals and its upside potential.
Macquarie Group Ltd. purchased almost 220000 shares of Ichor for $595,000 according to its 13F filings. TIAA CREF Investment Management LLC also invested $219,000 in Ichor, while Geode Capital Management LLC owns shares valued at $1,400,000.
The company’s business strategy of acquiring small companies to expand its revenue growth and earnings is working. It has been seeing strong market opportunities in the fluid delivery systems. Its Cal-Weld and Talon acquisitions are likely to expand its fluid delivery system. Ichor expects both acquisitions to generate positive revenue and earnings for the company in the days to come. Therefore, we can expect further acceleration its financial numbers, which could offer a significant support to the share price.
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