Entegris
ENTG
$162.89
+8.22%
Entegris Inc is a leading supplier of purification solutions and advanced materials, operating primarily within the semiconductor industry. The company specializes in materials science and purity, serving the entire semiconductor manufacturing supply chain, including fabricators, equipment makers, and materials suppliers, which positions it as a critical enabler for advanced chip production. The current investor narrative is driven by the company's exposure to the secular growth in semiconductor manufacturing, particularly for AI and high-performance computing applications, though recent quarterly results have shown a slight year-over-year revenue decline, sparking debate about the near-term cyclicality versus long-term structural demand.…
ENTG
Entegris
$162.89
Investment Opinion: Should I buy ENTG Today?
Rating & Thesis: Hold. Entegris is a high-quality company in a cyclical downturn, where the compelling long-term growth narrative is fully priced in, but near-term fundamentals and elevated valuation warrant caution. The mixed analyst sentiment, with four Buys against one Sell and one Neutral, reflects this uncertainty, and the lack of a clear consensus price target adds to the ambiguity.
Supporting Evidence: The stock trades at a high trailing P/E of 54.25x, though the forward P/E of 32.56x suggests expected earnings growth. Revenue has declined sequentially for the last three reported quarters, with a -3.05% YoY drop in Q4 2025. Gross margin compression from 45.57% to 38.35% YoY signals operational headwinds. Positively, the company maintains robust free cash flow of $570.7M and a strong current ratio of 3.35, providing financial stability.
Risks & Conditions: The two biggest risks are a deeper-than-expected semiconductor downturn prolonging revenue declines, and an inability to recover margins, invalidating the forward earnings estimates. This Hold rating would upgrade to Buy if the forward P/E compresses below 25x while revenue growth turns positive, or if gross margins stabilize above 40%. It would downgrade to Sell if revenue decline accelerates beyond -5% YoY or if the stock breaks below key technical support at $125 on deteriorating fundamentals. The stock is currently overvalued relative to its deteriorating near-term fundamentals but may be fairly valued if the anticipated 2026 earnings recovery materializes in full.
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ENTG 12-Month Price Forecast
The assessment is neutral based on conflicting signals: deteriorating fundamentals are offset by strong technicals and a balance sheet that can weather the storm. The market is clearly pricing in a second-half 2026 recovery, making the stock highly sensitive to any deviation from that path. The limited analyst coverage adds to the uncertainty. The stance would upgrade to bullish on confirmation of margin stabilization and a return to revenue growth, likely after the next two quarterly reports. It would turn bearish if the stock breaks below the $125 support level on high volume, signaling a failure of the recovery narrative.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Entegris's 12-month outlook, with a consensus price target around $211.76 and implied upside of +30.0% versus the current price.
Average Target
$211.76
6 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
6
covering this stock
Price Range
$130 - $212
Analyst target range
Analyst coverage for Entegris is limited, with only six analysts providing estimates, which is relatively sparse for a company of its market cap and can lead to higher volatility and less efficient price discovery. The consensus sentiment appears mixed but leans bullish, with recent institutional actions including a notable upgrade from UBS from Neutral to Buy in January 2026, alongside maintained Buy/Overweight ratings from Citigroup, Needham, Keybanc, and BMO Capital, countered by a Sell rating from Goldman Sachs and a downgrade to Neutral from Seaport Global. The average revenue estimate for the coming period is $4.56 billion with an EPS estimate of $6.06, but without a specific consensus price target provided in the data, the implied upside or downside from the current price cannot be calculated, highlighting the uncertainty and limited guidance from the analyst community.
Bulls vs Bears: ENTG Investment Factors
The investment debate for Entegris centers on the tension between a powerful technical uptrend driven by long-term secular semiconductor demand and near-term fundamental deterioration evidenced by declining revenue and compressed margins. Currently, the bullish case appears to have stronger momentum-based evidence, with the stock's price action defying weak quarterly results. However, the bearish fundamental evidence is concrete and worsening. The single most important factor in the thesis is whether the company can deliver the robust earnings recovery implied by its forward P/E of 32.56x. If execution falters or the semiconductor cycle troughs deeper, the elevated valuation presents significant downside risk.
Bullish
- Powerful Technical Uptrend: The stock has gained 89.05% over the past year and 62.64% over the past six months, significantly outperforming the SPY. Trading at 94.6% of its 52-week range from low to high, the momentum is strong and suggests a persistent bullish trend.
- Strong Free Cash Flow Generation: The company generated $570.7 million in trailing twelve-month free cash flow, providing ample liquidity to fund operations, service its manageable debt-to-equity ratio of 0.98, and return capital to shareholders without external financing needs.
- Analyst Sentiment Leans Bullish: Recent institutional actions include an upgrade from UBS to Buy, with maintained Buy/Overweight ratings from Citigroup, Needham, Keybanc, and BMO Capital. This positive sentiment, despite a recent revenue decline, reflects confidence in a recovery.
- Healthy Balance Sheet: A current ratio of 3.35 indicates strong short-term liquidity, well above the typical threshold of 2.0. This financial strength provides a buffer to navigate the current cyclical downturn in semiconductor demand.
Bearish
- Revenue Decline and Margin Compression: Q4 2025 revenue declined 3.05% YoY to $823.9M, continuing a sequential downtrend. Gross margin compressed sharply to 38.35% from 45.57% a year ago, indicating significant operational and pricing headwinds.
- Elevated Valuation Multiples: A trailing P/E of 54.25x is high by most standards and sits above the stock's recent historical median. The forward P/E of 32.56x, while lower, still prices in a flawless earnings recovery, leaving little room for error.
- High Volatility and Overextended Price: With a beta of 1.36, the stock is 36% more volatile than the market. Trading near its 52-week high after a massive rally, it is vulnerable to a sharp pullback, as evidenced by a recent max drawdown of -31.38%.
- Limited Analyst Coverage: Only six analysts provide estimates, which is sparse for a $21B market cap company. This can lead to less efficient price discovery and higher volatility due to concentrated or divergent opinions, such as Goldman Sachs' Sell rating.
ENTG Technical Analysis
The stock is in a sustained and powerful uptrend, evidenced by a 1-year price change of +89.05% and a 6-month gain of +62.64%. As of the latest close at $150.52, the price is trading near the top of its 52-week range, approximately 94.6% of the distance from the 52-week low of $67.97 to the high of $159.15, indicating strong momentum but also potential vulnerability to a pullback from overextended levels. Recent momentum remains positive but has moderated, with the stock up +3.78% over the past month and +39.01% over the past three months, suggesting the explosive rally from earlier in the year has transitioned into a more measured advance, though it continues to significantly outperform the SPY, which gained only 12.0% over the same three-month period. Key technical support is anchored at the 52-week low of $67.97, but a more relevant near-term support level is around the $125-$130 zone where the stock found footing in late May, while immediate resistance sits at the 52-week high of $159.15; a decisive breakout above this level would signal a continuation of the primary bull trend, whereas a failure could lead to a test of the $140 support. The stock exhibits high volatility with a beta of 1.36, meaning it is approximately 36% more volatile than the broader market, which investors must factor into position sizing and risk management.
Beta
1.36
1.36x market volatility
Max Drawdown
-31.4%
Largest decline past year
52-Week Range
$68-$168
Price range past year
Annual Return
+116.2%
Cumulative gain past year
| Period | ENTG Return | S&P 500 |
|---|---|---|
| 1m | +22.4% | +2.1% |
| 3m | +40.3% | +12.5% |
| 6m | +91.6% | +12.4% |
| 1y | +116.2% | +26.4% |
| ytd | +81.9% | +10.7% |
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ENTG Fundamental Analysis
Revenue growth has recently decelerated, with Q4 2025 revenue of $823.9 million representing a -3.05% year-over-year decline, continuing a trend of sequential quarterly revenue decreases from $849.8 million in Q4 2024; this suggests the company is navigating a cyclical downturn or inventory digestion phase within the semiconductor supply chain, though its long-term growth trajectory remains underpinned by industry expansion. Profitability remains intact but under pressure, with Q4 2025 net income of $49.4 million and a gross margin of 38.35%, which has compressed from 45.57% in the year-ago quarter, indicating margin headwinds potentially from product mix, pricing, or integration costs; the trailing twelve-month net margin stands at 7.37%, reflecting the company's ability to remain profitable through the cycle. The balance sheet is healthy with a strong current ratio of 3.35 and a manageable debt-to-equity ratio of 0.98, while the company generated substantial free cash flow of $570.7 million over the trailing twelve months, providing ample liquidity to fund operations, service debt, and potentially return capital to shareholders without relying on external financing.
Quarterly Revenue
$823900000.0B
2025-12
Revenue YoY Growth
-0.03%
YoY Comparison
Gross Margin
+0.38%
Latest Quarter
Free Cash Flow
$570700000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is ENTG Overvalued?
Given a positive net income, the primary valuation metric is the Price-to-Earnings (P/E) ratio. The trailing P/E is elevated at 54.25x, while the forward P/E based on estimated EPS is significantly lower at 32.56x, indicating the market is pricing in a substantial recovery in earnings over the next twelve months. Compared to sector averages (implied but not explicitly provided in the data), the trailing P/E appears high; however, a forward P/E in the low-30s may be more in line with high-quality semiconductor materials peers, though the exact premium or discount cannot be quantified without a specific industry average. Historically, the stock's own trailing P/E has fluctuated significantly, from a low near 21x in mid-2023 to highs above 119x in early 2024; the current 54.25x sits above the median of its recent historical range, suggesting the market is pricing in a robust recovery and is not at bargain levels, leaving limited room for multiple expansion.
PE
54.2x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range -42x~119x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
19.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks stem primarily from the company's exposure to the semiconductor cycle, as evidenced by a -3.05% YoY revenue decline in Q4 2025 and a severe 720 basis point compression in gross margin year-over-year. While free cash flow remains strong at $570.7M TTM, the net margin of 7.37% shows profitability is under pressure. The company's high debt-to-equity ratio of 0.98, though manageable, could become a concern if the downturn persists and cash generation slows, limiting financial flexibility.
Market & Competitive Risks are heightened by the stock's valuation and sector concentration. Trading at a trailing P/E of 54.25x, the stock is priced for perfection and is vulnerable to multiple compression if growth expectations are not met. Its beta of 1.36 indicates it will likely fall more than the market in a downturn. Furthermore, its near-total reliance on the semiconductor industry means it has no diversification to offset sector-specific headwinds like inventory corrections or reduced capital spending by chipmakers, which are currently occurring.
The Worst-Case Scenario involves a prolonged semiconductor downturn coupled with the company failing to defend margins, leading to consecutive earnings misses. This could trigger analyst downgrades (beyond the existing Sell rating from Goldman Sachs) and a rapid de-rating from current premium multiples. A realistic downside could see the stock re-test its 52-week low of $67.97, which would represent a loss of approximately -55% from the current price of $150.52. A more probable adverse scenario might involve a pullback to the $110-$125 support zone, representing a -17% to -27% decline, aligning with its recent volatility and max drawdown characteristics.
FAQ
The key risks are, in order of severity: 1) Cyclical Demand Risk: Revenue is declining (-3.05% YoY) due to semiconductor inventory digestion, and a prolonged downturn would hurt earnings. 2) Valuation Risk: The high trailing P/E of 54.25x makes the stock vulnerable to multiple compression if growth disappoints. 3) Operational Risk: Gross margin compression from 45.57% to 38.35% YoY indicates significant cost or pricing pressures that may not be temporary. 4) Market Risk: With a beta of 1.36, ENTG will likely fall more than the market in a broad sell-off, and its price is already near 52-week highs, increasing pullback risk.
The 12-month forecast presents three scenarios. The Base Case (50% probability) sees the stock trading between $135 and $159 (its current high), as the semiconductor cycle bottoms and a slow recovery begins. The Bull Case (30% probability) envisions a breakout above $159 to $180+ on a sharp demand recovery and margin expansion. The Bear Case (20% probability) projects a decline to the $110-$125 range if the downturn deepens and the earnings recovery is delayed. The most likely scenario is the Base Case, which assumes the company meets the consensus EPS estimate of $6.06, validating its current forward valuation.
ENTG appears overvalued based on trailing fundamentals but may be fairly valued if forward estimates are met. The trailing P/E of 54.25x is very high, especially in the context of declining revenue and compressed margins. However, the forward P/E of 32.56x, based on a consensus EPS estimate of $6.06, is more reasonable for a high-quality semiconductor materials company poised for recovery. The valuation implies the market expects a significant earnings rebound in 2026. Without that recovery, the stock is overvalued. Compared to its own history, the current multiple is above median levels, suggesting the market is paying a premium for anticipated growth.
ENTG is a Hold, not a clear-cut buy at current levels. For investors who already believe in the long-term semiconductor growth story and can tolerate high volatility (beta 1.36), any significant pullback towards the $130-$135 support zone could present a better entry point. The stock's 89% one-year gain has likely priced in much of the near-term optimism, and the -3.05% YoY revenue decline presents a fundamental headwind. It could be a good buy for patient, risk-tolerant investors if purchased on weakness, but chasing the current momentum carries substantial risk given the elevated forward P/E of 32.56x.
ENTG is more suitable for a long-term investment horizon of 3-5 years rather than short-term trading. Its fortunes are tied to the multi-year semiconductor capital expenditure cycle, and its value proposition as a critical materials supplier is a long-term structural story. However, its high beta of 1.36 and current cyclical weakness introduce significant short-term volatility, making it a challenging trade. The minimal dividend yield (0.48%) also does not support an income-oriented holding. Investors should be prepared to hold through cyclical swings to capture the secular growth in advanced chip manufacturing, suggesting a minimum holding period of at least 18-24 months to see through the current downturn.