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Ichor Holdings (ICHR)
NASDAQ:ICHR
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Ichor Holdings
(NASDAQ:ICHR)
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Rating:62Neutral
Price Target:
$56.00
▲(17.77% Upside)
Action:ReiteratedDate:02/10/26
The score is held back primarily by weak recent profitability and volatile/weakening free cash flow, despite a stronger balance sheet with reduced leverage. Offsetting these fundamentals, technical momentum is strong and the latest earnings call provided upbeat near-term guidance and a clearer path to margin recovery, though execution and end-market digestion risks remain.
Positive Factors
Balance sheet resilience
Materially reduced leverage and a sizable equity base lower financial distress risk and give management room to fund restructuring, facility ramps and working-capital swings. A stronger balance sheet supports multi-quarter execution of capacity expansion despite cyclical semiconductor demand.
Positive operating cash flow
Consistent operating cash generation, even amid accounting losses, indicates core product cash conversion and supports near-term liquidity. Positive OCF helps fund modest CapEx, working capital improvements and restructuring costs, improving the firm's ability to weather a multiquarter demand trough.
Clear operational recovery plan
Management has articulated concrete actions—Malaysia and Mexico manufacturing ramps, product insourcing, and commercial wins—that structurally target higher content, margin leverage and supply resiliency. These multi-quarter initiatives, if executed, can sustainably expand gross profit dollars and market share.
Negative Factors
Sustained losses & thin margins
Persistent negative net margins and compressed gross margins reduce the firm's ability to rebuild returns and fund organic growth. Continued loss-making trends can erode equity, limit reinvestment capacity and make margin recovery dependent on execution and higher volume over multiple quarters.
Free cash flow volatility
Volatile and recently negative free cash flow constrains financial flexibility for planned ramps and makes the company more sensitive to demand swings. Negative FCF increases reliance on cash reserves or debt to fund capacity builds and restructuring, elevating execution risk across the next several quarters.
Execution & end-market digestion risk
Qualification risk at the new Malaysia center and temporary capacity loss from footprint realignment can delay supply and revenue recognition. Combined with EUV/litho customer inventory digestion, these execution and end-market timing issues can materially delay margin recovery and revenue growth over the medium term.
Ichor Holdings (ICHR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.65B
Dividend YieldN/A
Average Volume (3M)1.12M
Price to Earnings (P/E)―
Beta (1Y)2.26
Revenue Growth16.86%
EPS Growth-26.89%
CountryUS
Employees1,820
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.01
Shares Outstanding34,644,333
10 Day Avg. Volume939,254
30 Day Avg. Volume1,116,897
Financial Highlights & Ratios
PEG Ratio-0.09
Price to Book (P/B)0.98
Price to Sales (P/S)0.68
P/FCF Ratio-103.25
Enterprise Value/Market Cap1.05
Enterprise Value/Revenue1.82
Enterprise Value/Gross Profit16.45
Enterprise Value/Ebitda-217.18
Forecast
1Y Price Target
$46.86Price Target Upside-1.45% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)0.79
Revenue Forecast (FY)$1.00B
Ichor Holdings Business Overview & Revenue Model
Company DescriptionIchor Holdings, Ltd. engages in the design, engineering, and manufacture of fluid delivery subsystems and components for semiconductor capital equipment. It primarily offers gas and chemical delivery systems and subsystems that are used in the manufacturing of semiconductor devices. The company's gas delivery subsystems deliver, monitor, and control gases used in semiconductor manufacturing processes, such as etch and deposition; and chemical delivery subsystems blend and dispense the reactive liquid chemistries used in semiconductor manufacturing processes comprising chemical-mechanical planarization, electroplating, and cleaning. It also manufactures precision machined components, weldments, electron beam, laser-welded components, precision vacuum and hydrogen brazing, surface treatment technologies, and other proprietary products for use in fluid delivery systems. The company primarily markets its products directly and through resellers to equipment OEMs in the semiconductor equipment market in the United States, the United Kingdom, Singapore, Malaysia, Korea, Mexico, and internationally. Ichor Holdings, Ltd. was incorporated in 1999 and is headquartered in Fremont, California.
How the Company Makes MoneyIchor Holdings generates revenue through the sale of its fluid delivery systems and related components, which are sold to major semiconductor manufacturers. The company has established key partnerships with leading companies in the semiconductor industry, allowing it to secure long-term contracts that provide a stable revenue stream. Additionally, Ichor offers maintenance and support services for its products, contributing to recurring revenue. The demand for advanced semiconductor manufacturing technologies and the growing market for integrated circuits further bolster Ichor's earnings potential.
Ichor Holdings Key Performance Indicators (KPIs)
Ichor Holdings Earnings Call Summary
Earnings Call Date:Feb 09, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 12, 2026
Earnings Call Sentiment Positive
The call conveyed a constructive outlook: solid FY2025 results with 12% revenue growth, Q4 outperformance, stronger-than-expected early-2026 demand, raised Q1 guidance with double-digit sequential growth, and clear operational plans (Mexico expansion, Malaysia facility, product insourcing) to drive margin recovery and share gains. Near-term challenges include a Q4 trough, temporary capacity reductions during the global footprint realignment, lingering EUV/litho inventory digestion, restructuring charges, and qualification risk in the new Malaysia facility. Management expects margins and gross profit dollars to materially improve in the second half of 2026 and anticipates sequential growth each quarter, which together with balance sheet improvements supports a positive outlook.Q4-2025 Updates
Positive Updates
Full-Year Revenue Growth
Fiscal 2025 revenue of $948 million, up 12% year-over-year, driven primarily by strength in etch and deposition.
Q4 and Q1 Outperformance and Guidance
Q4 revenue $223.6M (reported as $224M), above the midpoint of guidance. Q1 2026 guidance of $240M–$260M (midpoint ~$250M) implies double-digit sequential growth (~11.7% vs Q4 midpoint) and management expects sequential growth every quarter in 2026.
Improving Gross Margin Trend
Q4 gross margin 11.7%, ~70 basis points above the midpoint of guidance. Management expects gross profit dollars to grow about twice the rate of revenues beginning in Q2 and forecasts Q1 gross margins in a 12%–13% range with meaningful margin improvement by midyear.
Operational Investments and Capacity Expansion
Large manufacturing center in Malaysia began operation and Mexico machining expansion will complete later in 2026 to serve as high-volume manufacturing centers and drive supply resiliency; CapEx moderation planned from ~4% of revenue (~$36M in 2025) to ~3% in 2026.
Product Strategy and Commercial Wins
Design wins in non-semiconductor/commercial space are beginning to convert to revenue; commercial business grew significantly in 2025 and is now the company's fifth largest customer (sub-5% today with a medium-term goal to reach ~10%). Target to have Ichor-branded products support up to 75% of system content by year-end 2026.
Balance Sheet and Cash Flow Improvements
Cash and equivalents $98.3M at fiscal year-end (up $6M from Q3). Working capital improvements generated $9M of positive cash flow; Q4 capex ~$3M and free cash flow ~$6M. Total debt $123M, down from $129M a year ago.
Operational Metrics and Efficiency
DSO improved to 29 days (better than Q3) and inventory turns remained steady at 3.3, indicating improving receivables management amid the demand ramp.
Profitability and Expense Guidance
Q4 operating expenses $23.4M (slightly lower than forecast) with operating income $2.7M and Q4 non-GAAP EPS $0.01. Q1 OpEx projected at ~$24M and management expects a relatively consistent OpEx run rate for 2026 (full-year OpEx ~ +5% vs fiscal 2025).
Negative Updates
Q4 Cycle Trough and Soft End Markets
Management described Q4 as the trough with modest sequential decline from Q3. Softening build rates of EUV/litho and decreased demand in certain trailing-edge markets partially offset growth.
Temporary Capacity Reduction During Realignment
Relocating machining assets to Mexico and Malaysia will temporarily reduce internal machining capacity, creating a near-term headwind in the first half of 2026 that is expected to be flushed through by midyear.
Margin Pressure and 2025 Challenges
Company cited primary sources of margin and rent challenges experienced in 2025; near-term gross margins remain modest (11.7% in Q4) and recovery is expected to be gradual and second-half weighted.
Restructuring and One-Time Charges
Approximately $10M of restructuring actions taken in Q4 and across fiscal 2025; while the majority is complete, some additional wind-down activities and smaller accruals remain possible.
Malaysia Facility Qualification Risk
Malaysia is the company’s largest facility and began operations recently; management noted it carries higher qualification risk versus Mexico and will be more volume-focused, implying execution risk as it ramps.
EUV/Litho Customer Inventory Digestion
Litho/EUV customer inventory digestion remains a headwind; management expects that digestion to be largely complete by ~Q3 2026 but cautioned that some uncertainty remains.
Rising Effective Tax Rate
Expected non-GAAP effective tax rate rising to ~20%–25% in 2026 due to geographic profit distribution and sunsetting of Singapore pioneer status, increasing tax expense (Q1 tax expense ~$1.1M guidance).
Company Guidance
The company guided Q1 revenue of $240–$260 million (midpoint implying double‑digit sequential growth versus Q4’s $223.6M), Q1 gross margins of 12–13%, and Q1 operating expenses of about $24 million (a ~flat $24M OpEx run‑rate for 2026, ~+5% vs. FY2025); net interest expense is expected to be roughly $1.7M in Q1 and about $7M for 2026, Q1 tax expense ~$1.1M with an assumed non‑GAAP effective tax rate of 20–25%, and Q1 diluted EPS of $0.08–$0.16 on ~35.1M shares; management expects sequential revenue growth every quarter in 2026, gross profit dollars to grow at roughly twice the rate of revenues beginning in Q2 with meaningful margin improvement by midyear, CapEx to moderate to about 3% of revenue in 2026 (vs. ~4% in 2025), and most restructuring actions largely complete.Ichor Holdings Financial Statement Overview
Summary
Financials are cyclical and currently pressured: income statement performance is weak with sustained losses and thinner gross margins (Income Statement Score 38). This is partly offset by a more resilient balance sheet with substantially reduced leverage and low debt-to-equity (~0.24) (Balance Sheet Score 72). Cash flow is mixed—operating cash flow remains positive, but free cash flow turned negative in TTM, raising durability concerns (Cash Flow Score 55).Income Statement
Operating performance has deteriorated meaningfully from the 2020–2022 profit cycle into sustained losses in 2023–2024 and deeper losses in TTM (Trailing-Twelve-Months). Revenue rebounded modestly in 2024 but turned down again in TTM, while profitability compressed sharply: gross margin stepped down versus prior years and net margin moved further negative. The key positive is that the company has previously demonstrated solid profitability (2021–2022), but the current trajectory is weak and visibility looks more volatile.38
Negative
Balance Sheet
The balance sheet looks relatively resilient, supported by a sizable equity base and improving leverage over time. Debt levels have come down substantially from 2022–2023, and debt-to-equity is now low (around ~0.24 in 2024 and TTM), which reduces financial risk. The main weakness is that returns on equity are currently negative due to net losses, which can pressure book value over time if the downturn persists.72
Positive
Cash Flow
Cash generation is mixed. Operating cash flow remains positive in 2024 and TTM (Trailing-Twelve-Months), indicating some underlying cash resilience despite accounting losses, but free cash flow weakened materially—turning negative in TTM after being positive in 2023–2024. The volatility in free cash flow (including negative periods in 2021 and TTM) is a concern, though the company has shown it can generate strong free cash flow in better demand environments (notably 2023).55
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 947.65M | 849.04M | 811.12M | 1.28B | 1.10B |
| Gross Profit | 87.78M | 103.33M | 103.40M | 211.86M | 177.48M |
| EBITDA | -7.44M | 21.96M | 22.88M | 121.49M | 106.20M |
| Net Income | -52.78M | -20.82M | -42.98M | 72.80M | 70.90M |
Balance Sheet | |||||
| Total Assets | 942.88M | 995.56M | 938.48M | 1.08B | 1.02B |
| Cash, Cash Equivalents and Short-Term Investments | 98.29M | 108.67M | 79.95M | 86.47M | 75.50M |
| Total Debt | 185.60M | 174.21M | 286.33M | 341.74M | 322.74M |
| Total Liabilities | 278.99M | 297.23M | 373.80M | 496.25M | 520.16M |
| Stockholders Equity | 663.89M | 698.34M | 564.68M | 587.50M | 500.71M |
Cash Flow | |||||
| Free Cash Flow | -6.28M | 10.24M | 42.14M | 2.02M | -5.57M |
| Operating Cash Flow | 29.89M | 27.88M | 57.63M | 31.45M | 15.27M |
| Investing Cash Flow | -36.17M | -17.64M | -15.50M | -28.93M | -289.58M |
| Financing Cash Flow | -4.10M | 18.47M | -48.65M | 8.46M | 96.91M |
Ichor Holdings Technical Analysis
Positive
47.55
Price Trends
31.37
Positive
24.94
Positive
21.80
Positive
Market Momentum
5.71
Positive
62.93
Neutral
45.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ICHR, the sentiment is Positive. The current price of 47.55 is above the 20-day moving average (MA) of 42.14, above the 50-day MA of 31.37, and above the 200-day MA of 21.80, indicating a bullish trend. The MACD of 5.71 indicates Positive momentum. The RSI at 62.93 is Neutral, neither overbought nor oversold. The STOCH value of 45.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $1.43B | 12.11 | 96.90% | ― | 0.19% | ― | |
62 Neutral | $1.65B | -30.90 | -7.75% | ― | 16.86% | -26.89% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $1.60B | 100.45 | 0.98% | 2.25% | 0.96% | -85.27% | |
50 Neutral | $726.66M | -8.17 | -45.62% | ― | -44.30% | 16.42% | |
46 Neutral | $46.23M | ― | -120.36% | ― | 2.80% | ― | |
45 Neutral | $144.01M | -0.51 | -1331.73% | ― | ― | -1827.24% |
* Technology Sector Average
ICHR
Ichor Holdings
47.55
19.47
69.34%
IMOS
ChipMOS Technologies
44.93
27.32
155.11%
SQNS
Sequans Communications S A
2.89
-19.51
-87.10%
SKYT
SkyWater Technology
29.46
21.12
253.24%
BZAI
Blaize Holdings
1.18
-1.76
-59.86%
LAES
SEALSQ Corp
3.93
1.66
73.13%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.