ACM Research, Inc. (ACMR): what the price requires
At today's price, ACM Research, Inc. (ACMR) is priced for today's economics sustained for ~21.3 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/ACMR
Headline
| Field | Value |
|---|---|
| Ticker | ACMR |
| Company | ACM Research, Inc. |
| Current price | $94.13/sh |
| Composition | Single Wafer Cleaning, Tahoe and Semi-Critical Cleaning Equipment 69% / ECP (front-end and packaging), Furnace and Other Technologies 22% / Advanced Packaging (excluding ECP), Services & Spares 8% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 21.0% |
| Operating margin today | 13.8% |
| Margin expansion implied | +7.2pp |
| Must persist for | 21.3y |
| Multiple paid | 49x operating income |
The operating-margin requirement is derived from the framework's value band at year 5, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 14.1% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~3.1 years.
Reconcile: at the x-ray's 9.3% required return this reads ~9.6 years; the models below use their own rates.
How unusual the bet is: high
| Reference | Value |
|---|---|
| vs own history | -0.51σ |
| cohort percentile (of 225 peers) | 89 |
| sustained it ~10 years at this level | 14% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 8.76x | 5 | expensive |
| Earnings | 5.51x | 2 | expensive |
| Relative | 2.74x | 3 | expensive |
| Growth | 0.88x | 1 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.8%); the inversion above states its own rate.
Per-Model Detail (n=11)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $0.00 | — | no | Negative/zero FCF — equity value floored at $0 |
| DCF Exit Multiple | Growth | $0.00 | — | no | Negative/zero FCF or EBITDA — equity value floored at $0 |
| Relative Valuation | Relative | $52.04 | 1.81x | yes | P/E 34.25x (blended: static sector reference 18x + trailing (TTM) 72x), scenarios: 27.8x / 34.3x / 40.7x (bear / base = reference held flat / bull), EV/EBITDA 21.46x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $14.10 | 6.68x | yes | BV/sh $22.67, ROE (TTM) 5.8%, ke 9.3% |
| Two-Stage Excess Return | Asset | $10.75 | 8.76x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $107.23 | 0.88x | yes | Rev $1.0B, growth 20% (input: historical growth; tapered), Terminal P/S: 5.5x / 6.8x / 8.1x (bear / base = today's held flat / bull, cap 12x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $21.50 | 4.38x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.10B × (1−13%) / WACC 8.8% → EPV (no growth) |
| Residual Income | Asset | $10.33 | 9.11x | yes | BV $22.67 + 5yr PV of (ROE (TTM) 5.8% − Kₑ 9.3%) × BV; BV grows 3.7%/yr |
| Graham Number | Asset | $25.85 | 3.64x | yes | √(22.5 × EPS $1.31 × BVPS $22.67) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $31.51 | 2.99x | yes | EBITDA $0.14B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $1.10 | 85.57x | yes | EPS $1.31 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $7.77 | 12.11x | yes | BV $22.67 × (ROIC 3.0% / WACC 8.8%) |
| P/Sales Sector | Relative | $34.41 | 2.74x | yes | Revenue $0.96B × sector P/S 2.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $14.16 | 6.65x | yes | EPS $1.31 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $578.8m |
| Net debt / NOPAT (after-tax) | -5.40x (net cash) |
| Net debt / operating income (pre-tax) | -4.72x (net cash) |
| Interest coverage | 17.3x |
| Share count CAGR (dilution) | 1.4% |
| Burning cash | yes |
Bullet Takeaways
- ACM Research makes wafer-cleaning and electroplating tools for chip fabs, and its growth engine is China: orders are rising fast (newly signed orders up 65% year over year in the first quarter), with a backlog that reached about $1.27 billion.
- The defining risk is the same as the engine: the business runs through ACM Shanghai, and the filing warns that U.S. export controls may limit "the ability of ACM Shanghai to acquire such parts from Japan and the Netherlands to fulfill customer requirements", so the supply chain and the customer base sit on opposite sides of a hardening trade line.
- Watch the conversion of that backlog into cash, not just revenue: the company is growing fast but its free cash flow is negative as receivables and inventory build, so the cleanest signal is whether orders turn into collected dollars.
Bull Case
The structural advantage ACM Research is building is a domestic-champion position inside the fastest-spending semiconductor market on earth. Its tools span the cleaning step that every wafer passes through, the Ultra C platform that "cleans wafers", the Ultra C Thin Wafer Scrubber for thin-wafer assembly, and the Ultra C Wet Etcher, plus electroplating systems for advanced packaging. As China builds out its own chip supply chain, the local fabs need local equipment partners, and ACM, operating through ACM Shanghai with a Chinese listing of that subsidiary, is positioned as exactly that. The moat is not pure technology; it is being the trusted, in-country supplier at the moment the country is determined to localize.
The demand evidence is concrete and recent. Newly signed orders rose 65% year over year in the first quarter of 2026, backlog reached roughly $1.27 billion, up about 34%, and management has been widening the product mix, electroplating systems alone are running near 30% of new orders this year on the strength of advanced packaging. That diversification matters: a company that started as a cleaning specialist is becoming a multi-tool supplier, which deepens its share of each fab's equipment budget and reduces dependence on any single product cycle. Revenue grew 34% in the first quarter, and the full-year 2026 guide of $1,080 million to $1,175 million implies the momentum continues.
The balance sheet supports the run. ACM holds about $579 million of net cash against roughly $328 million of gross debt, and interest is covered comfortably, so the company can fund the working capital that fast growth in China consumes without being forced to the equity market on bad terms. The bull case is a simple compounding story: a broadening tool portfolio, a record and growing backlog, and a structural tailwind from China's localization drive, all carried by a net-cash balance sheet. If even part of the priced-in growth materializes, the franchise ACM is assembling inside China is worth far more than its trailing earnings suggest, and the static methods that value it on those earnings miss the trajectory entirely.
Bear Case
The competitive and geopolitical disruption is the same fact viewed from the other side, and it is severe. ACM's customers are Chinese fabs, but its supply chain reaches into the United States, Japan, and the Netherlands, the three governments tightening export controls on semiconductor equipment. The filing is explicit that the new restrictions may limit "the ability of ACM Shanghai to acquire such parts from Japan and the Netherlands to fulfill customer requirements," which means the company can be squeezed from above even when demand below is strong. Worse, the localization drive that powers the bull case also breeds domestic Chinese competitors, the very rivals the policy is designed to nurture, so ACM is racing to win share in a market whose government has an explicit interest in eventually sourcing from a home-grown supplier rather than a U.S.-controlled parent.
The structural complications compound. ACM Shanghai is no longer wholly owned: after its listing on China's STAR Market, the parent shares the economics of its core operating entity with public minority holders, so a dollar of value created in Shanghai does not all flow to the U.S. shareholder. Layer on the China audit-access and PCAOB-inspection risks the filing flags around "audit inspections of accounting firms operating in mainland China," and the U.S. holder owns a complicated claim on a Chinese business through a structure that policy on both sides can disrupt.
The cash conversion is the quiet third problem. The company is growing revenue at a 30-percent-plus clip but its free cash flow is negative: receivables and inventory absorb cash as orders scale, which is common in fast-growing China hardware but means the reported profit is not yet showing up in the bank. The share count has also been rising, about 4.4% a year, so existing holders are being diluted while they wait. And the valuation gives none of this any cushion: the price pays about 58 times company-wide operating income, a multiple that implies operating profit compounding at its self-funding ceiling for more than two decades and a step-change in operating margin from about 12.5% today toward the mid-twenties, a level only about 14% of comparable fast-growers sustained for even ten years. The analysts who cover the name value it well below the market price. The bear case is that a single tightening of export rules, or a domestic competitor winning a key fab, resets the growth assumption the entire price depends on.
Valuation
The price makes a demanding bet, and the inversion states it plainly. At $109.85 the market is paying about 58 times company-wide operating income, which implies operating profit compounding at roughly its self-funding ceiling for about 24 years, and a margin expansion from the current 12.5% toward the mid-twenties. The historical base rate is unforgiving: only about 14% of comparable fast-growers sustained that kind of pace for even a decade. This is a price built almost entirely on durable, China-driven compounding rather than on anything the trailing income statement shows.
That is why the families of methods split so sharply. The asset-value methods, anchored on a book value near $22.67 a share against a thin trailing return on equity, land far below the price. The earnings-power method, capitalizing normalized operating income, sits well under it, and the peer-multiple lens does too. The single family that reaches today's price is the forward-growth lens, and it gets there only by extrapolating the recent 20-percent-plus revenue growth. So the static methods uniformly say richly valued and only the growth method says fairly valued, which is the textbook signature of a stock priced as a long-duration growth bet. For a business this exposed to a single country's policy, that concentration of the thesis in one assumption is the risk.
Solvency reads better than the income statement but carries an asterisk. ACM holds about $579 million of net cash, and interest is well covered, so there is no near-term financing risk. But free cash flow is negative as working capital funds the growth, and the share count is rising, so the net-cash position is a snapshot of a business consuming cash to grow, not throwing it off. The downside is bounded less by liquidation value, which the asset methods put far below the price, than by the order book, and the order book is precisely what export policy and domestic competition can disrupt. The price assumes the backlog converts cleanly for years; the methods grounded in current economics say it has a long way to fall if it does not.
Catalysts
The order momentum is the live catalyst. At a Shanghai investor event on June 16, 2026, management reported that newly signed orders rose 65% year over year in the first quarter, reaffirmed full-year revenue guidance, and highlighted strong demand for sulfuric-acid cleaning tools and electroplating systems, with electroplating running near 30% of new orders this year on advanced-packaging growth. First-quarter 2026 revenue grew 34% year over year, and the company guided full-year revenue to $1,080 million to $1,175 million. Backlog of about $1.27 billion, up roughly 34%, is the forward visibility underneath those numbers.
The offsetting catalysts are policy and competition. The business depends on China's semiconductor capital spending continuing, and on ACM Shanghai retaining access to parts from Japan and the Netherlands that U.S.-aligned export controls increasingly restrict. Any tightening of those controls, or a slowdown in Chinese fab investment, would hit orders directly, which is why each quarter's order figure matters more than the revenue print.
Worth stating plainly: the analysts who cover ACM value it far below where it trades, with recent targets clustered in roughly the $50 to $70 range against a market price near $110. Some firms have been raising targets on backlog visibility and sustained China demand, while others hold a more cautious view. That wide gap between the street's estimate of value and the market price is the situation in miniature: the price reflects a long-duration China growth conviction the analysts' nearer-term models do not fully credit.
Peer Cohorts (Per Segment, With Filing Citations)
Semiconductor process equipment (single reportable segment) (reported)
- LRCX (LAM RESEARCH CORPORATION)
- FY2025 10-K: …into a semiconductor production line. We believe that once a semiconductor manufacturer selects a particular supplier's processing equipment, the manufacturer generally relies upon that equipment for that specific production line application for an extended period of time, especially for customers that are more…
- FY2025 10-K: …Revenue is recognized in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Inventory Valuation: Inventories are stated at the lower of cost or net realizable value using standard costs that approximate actual costs on a first-in, first-out basis.…
- ACLS (AXCELIS TECHNOLOGIES INC)
- FY2025 10-K: …a party to litigation that arises in the normal course of our business operations. (c) Indemnifications Our system sales agreements typically include provisions under which we agree to take certain actions, provide certain remedies and defend our customers against third-party claims of intellectual property…
- FY2025 10-K: …(including the introduction of 5G mobile networks), artificial intelligence, large language models (e.g. ChatGPT), data analytics and visualization, and the growth in the Internet of Things, and the increasing complexity of device features. These chips are used in power management, data input, such as image sensors,…
- VECO (VEECO INSTRUMENTS INC.)
- FY2025 10-K: …and measures its results in one operating segment and therefore has one reportable segment: the development, manufacture, sales, and support of semiconductor and thin film process equipment primarily sold to make electronic devices. The accounting policies of this one operating segment are the same as those described…
- FY2025 10-K: 630 See accompanying Notes to the Consolidated Financial Statements. F-8 Table of Contents Note 1 - Significant Accounting Policies (a) Description of Business Veeco Instruments Inc. (together with its consolidated subsidiaries, "Veeco," or the "Company") operates in a single segment: the development,…
- ASML (ASML HOLDING NV)
- FY2025 20-F: …Scope 3 CO 2 e emissions intensity All other indirect carbon dioxide emissions that occur in an organization's value chain expressed as a percentage of revenue or gross profit. SEC The United States Securities and Exchange Commission SEMI Semiconductor Equipment and Materials International SEMI S2 SEMI S2 - Safety…
- FY2025 20-F: …manufacturing equipment and serve as a bridge to the customers who depend on them. Read more STRATEGIC REPORT CORPORATE GOVERNANCE SUSTAINABILITY FINANCIALS ASML Annual Report 2025 31 At a glance Q&A with the CEO Our business Financial p erformance Risk and security Our business strategy (continued) 2 Extend our…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
company investor event, June 16, 2026 · company FY2026 guidance, 2026 · company disclosure, 2026 · analyst consensus, June 2026