Ichor stock rating downgraded by B.Riley amid margin concerns

Investing.com - B.Riley has downgraded Ichor Holdings (NASDAQ:ICHR) from Buy to Neutral and reduced its price target to $18.00 from $30.00, citing concerns about gross margin performance. The stock, currently trading at $20.14, has seen a significant decline of nearly 38% over the past six months, according to InvestingPro data.

The downgrade follows Ichor’s announcement of a CEO transition on Monday, which preceded the company’s quarterly earnings report. While Ichor delivered slightly better-than-expected sales and in-line guidance, with revenue growth of 13.4% in the last twelve months, its earnings per share fell short of expectations.

B.Riley noted that for the second consecutive quarter, Ichor failed to achieve the anticipated gross margin expansion, contradicting the firm’s preview expectations. This margin performance was the primary factor behind the rating change.

Despite some positive developments, including a favorable industry backdrop and new customer wins that could support long-term margin improvement, B.Riley has significantly reduced its earnings forecasts for Ichor. The firm cut its EPS estimates for 2025-2027 by 55%, 27%, and 10% to $0.45, $1.17, and $1.80, respectively.

Ichor still believes gross margins of 19-20% are eventually possible, according to B.Riley’s report, but current execution challenges have prompted the more cautious outlook on the stock.

In other recent news, Ichor Holdings reported its Q2 2025 earnings, showing a notable discrepancy between earnings per share (EPS) and revenue outcomes. The company experienced a significant shortfall in EPS, recording $0.03 compared to the expected $0.32. However, Ichor Holdings surprised investors with its revenue, which totaled $240.3 million, surpassing the anticipated $234.5 million. Despite the EPS miss, the revenue beat was a positive aspect for the company. These recent developments have caught the attention of analysts and investors alike. The earnings report highlights the mixed financial performance of Ichor Holdings, with revenue outperforming expectations while EPS fell considerably short.

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