ICHR - Embedded Expectations Analysis - 2021 12 16
Ichor Holdings (ICHR) currently trades below corporate but around historical averages relative to Uniform earnings, with an 11.3x Uniform P/E (Fwd. V/E').At these levels, markets are pricing in expectations for Uniform ROA to compress to 17%, accompanied by 9% Uniform asset growth.
Meanwhile, analysts expect Uniform ROA to improve to 39% by 2022, accompanied by 21% Uniform asset growth.
Given the firm's market position and strong semiconductor chip demand, there is fundamental potential for stronger-than-priced-in performance.
If the company can capitalize on its tailwinds, it could drive Uniform ROA to 35% with 9% Uniform asset growth going forward, which would imply a stock price closer to $98, representing significant potential equity upside for the firm.
Moreover, the firm's most recent earnings call suggests management is confident about WFE demand, guidance, and output recovery.
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