Wang & Lee Group board approves 250-to-1 reverse share split
On Tuesday, DA Davidson lowered the price target for Ichor Holdings (NASDAQ:ICHR) stock to $45 from the previous target of $50, while maintaining a Buy rating on the company. The revision reflects concerns over the current market environment, as the firm adjusts its outlook for the semiconductor industry. Currently trading at $16.73, the stock sits near its 52-week low of $15.84, while analyst targets range from $23 to $50, according to InvestingPro data.
Analyst Thomas Diffely at DA Davidson cited tariff and export control uncertainty as factors negatively affecting demand for Ichor Holdings’ products. Additionally, Diffely mentioned that the initial ramp-up of internally sourced components is causing growing pains, impacting supply and margins for the company. InvestingPro data shows the company’s current gross profit margin at 12.28%, reflecting these operational challenges. Despite these pressures, the company maintains a healthy current ratio of 3.34, indicating strong ability to meet short-term obligations.
In light of these challenges, DA Davidson has revised its estimates for Ichor Holdings, a step that has been taken for every semiconductor capital equipment (semicap) company the firm covers this quarter. The adjustment in the price target indicates a more cautious short-term outlook but does not change the firm’s long-term confidence in the company.
Despite the near-term headwinds, DA Davidson’s analysis suggests optimism for Ichor Holdings’ future. The firm’s long-term view predicts a recovery in the semiconductor cycle and anticipates company-specific margin expansion. This expansion is expected to come from an increase in the proportion of internally sourced components, growing from 10% in 2023 to 30% by the end of 2025. InvestingPro forecasts support this optimistic outlook, projecting 18% revenue growth for FY2025. For deeper insights into Ichor Holdings’ valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
DA Davidson’s stance implies that the current market conditions may represent the lowest point for Ichor Holdings, with expectations for the company’s stock to climb significantly higher over the next few years. The firm believes that the strategic moves Ichor is making now will pay off in the long run, despite the short-term market turbulence.
In other recent news, Ichor Holdings Ltd reported its first-quarter 2025 earnings, which fell short of expectations. The company posted earnings per share (EPS) of $0.12, missing the forecasted $0.24. Revenue also came in slightly below projections at $244.47 million, compared to the anticipated $244.95 million. This earnings miss has raised concerns among investors, particularly due to the lower-than-expected gross margin of 12.4%, which was below the forecasted 14.5%. Despite the earnings shortfall, Ichor Holdings reported a 21% year-over-year increase in revenue, reflecting some positive growth. The company is planning to expand its global operations, including a new facility in Malaysia, which could support future growth. Looking ahead, Ichor Holdings provided revenue guidance for the second quarter of 2025, estimating between $225 million and $245 million, with gross margins expected to range from 12.5% to 14%. Additionally, the company is working to address challenges related to tariffs and export controls, which have created uncertainty in the semiconductor equipment market.
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