Entegris, Inc.

ENTG Analysis Summary

Technical Analysis: ENTG has exhibited remarkable momentum with impressive short-term gains, significantly outperforming the market. However, this sharp rally has placed the stock in an overbought condition near its 52-week high, accompanied by substantial historical volatility and a notable maximum drawdown. Investors should be cautious of potential near-term pullbacks after such a strong upward move.

Fundamentals: While ENTG shows modest revenue growth, its profitability is under pressure with declining net income and gross margins. The company maintains solid liquidity and manageable debt, but low interest coverage and operational efficiency metrics raise concerns about its ability to sustain earnings and effectively utilize assets.

Valuation & Risk: ENTG trades at premium valuation multiples that imply high growth expectations, yet a negative PEG ratio signals these may be unrealistic. Its high volatility and rich valuation compared to likely industry peers suggest significant risk, especially if operational improvements do not materialize as anticipated.

Buy Recommendation: ENTG is not recommended for purchase at this time. Despite strong recent momentum, the stock appears overvalued with weakening profitability and operational inefficiencies. The high valuation multiples are not well-supported by near-term earnings growth, and the elevated volatility increases downside risk. Investors may want to wait for a more attractive entry point or signs of sustained operational improvement before considering a position.

*Note: This is not investment advice, for reference only.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on the provided analysis, the 12-month outlook for ENTG is cautious. Near-term catalysts appear limited, as the stock's recent surge seems driven by momentum rather than identifiable operational improvements, leaving it vulnerable to a pullback from overbought conditions. The primary risk is that the company's premium valuation is unsustainable if it fails to reverse the trend of declining profitability and weak operational efficiency. Given the negative fundamental momentum and high volatility, the stock could face significant pressure, with a potential downside target range towards the $90-$110 level if growth expectations are not met, though the lack of a clear analyst target price underscores the heightened uncertainty.

Wall Street Consensus

Most Wall Street analysts are optimistic about Entegris, Inc.'s 12-month outlook, with consensus target around $132.67, indicating expected upside potential.

Overall, ENTG has investment potential but also faces challenges. Here are key factors to weigh before investing.

ENTG has demonstrated exceptional performance driven by a dramatic price surge over the past quarter.

The stock has delivered outstanding short-term gains, rising 12.09% over one month and a remarkable 56.52% over three months, significantly outperforming the market by 56.24% and highlighting its strong recent momentum. This volatility is consistent with its beta of 1.32, indicating higher-than-average swings compared to the broader market. The stock's current price sits near the top of its 52-week range, approximately 5.7% below the high of $138.99. Following such a steep ascent, ENTG appears to be in an overbought condition, with investors needing to weigh its momentum against the substantial 41.74% maximum drawdown experienced in the past year.

Revenue & Profitability ENTG experienced a modest quarter-over-quarter revenue increase from $807M to $824M. However, profitability compressed significantly, with the net income ratio falling from 8.7% to 6.0% and gross margin declining from 43.5% to 38.4%, primarily driven by a notable increase in the cost of revenue. This indicates margin pressure despite top-line growth.

Financial Health The company maintains a strong liquidity position with a robust current ratio of 3.35 and a manageable debt-equity ratio of 0.98. However, the interest coverage ratio of 2.85 is relatively low, suggesting that operating earnings barely cover interest expenses, which could be a concern if profitability weakens further.

Operational Efficiency Operational efficiency is challenged, as reflected in a low return on equity of 1.25% and a very low asset turnover of 0.10. The high days of inventory outstanding at 114 days points to potential inefficiencies in inventory management, contributing to the subdued returns on capital employed.

Valuation Level: ENTG trades at premium valuation multiples with a TTM PE of 83.53 and a forward PE of 64.77, indicating high growth expectations from the market. However, the negative PEG ratio of -2.29 suggests these expectations are not supported by near-term earnings growth projections, pointing to potential overvaluation. The elevated EV/EBITDA of 71.59 further reinforces a rich valuation level relative to its operational cash flow generation.

Peer Comparison: A peer comparison cannot be conducted with precision due to the unavailability of industry average data. However, the extremely high PE and EV/EBITDA ratios are atypical for most mature industries and suggest ENTG's valuation is likely significantly elevated compared to broader market or sector norms. This analysis would benefit from specific industry benchmarks to provide a definitive contextual assessment.

Volatility Risk: ENTG exhibits elevated volatility risk, with a Beta of 1.321 indicating it is approximately 32% more volatile than the broader market. This is compounded by a significant 1-year maximum drawdown of -41.74%, highlighting substantial potential for pronounced price declines during market downturns. Investors should be prepared for above-average price swings.

Other Risks: While the absence of reported short interest eliminates the immediate threat of a short squeeze, it does not inherently signify a low-risk profile. Market-wide sector pressures or company-specific operational challenges could still impact performance. Investors should monitor broader industry trends and company execution risks closely.