Entegris, Inc. (ENTG): what the price requires

At today's price, Entegris, Inc. (ENTG) is priced for today's economics sustained for ~18.9 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/ENTG

Headline

FieldValue
TickerENTG
CompanyEntegris, Inc.
Current price$137.02/sh
CompositionFabs 62% / Equipment and Engineering 15% / Chemical and Materials 10% / Semi Distributor/Other 9% / Non-Semi 5%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed35.0%
Operating margin today15.5%
Margin expansion implied+19.5pp
Must persist for18.9y
Multiple paid48x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 13.3% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.8 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

ReferenceValue
vs own history+0.38σ
cohort percentile (of 74 peers)95
sustained it ~10 years at this level15%
implied end-window share0%

Valuation X-Ray

Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.

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.

FamilyMedian price/FVModelsReads
Asset8.10x4expensive
Earnings8.49x4expensive
Relative2.60x3expensive
Growth1.63x3expensive

Families that call it expensive: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.1%); the inversion above states its own rate.

Per-Model Detail (n=14)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$20.406.72xyesFCF base $0.5B, growth -0% (input: historical growth), terminal g 0.5%, WACC 8.0%, 5yr projection
DCF Exit MultipleGrowth$103.781.32xyesExit EV/EBITDA: 34.5x / 36.5x / 38.5x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$62.902.18xyesP/E 36.39x (blended: static sector reference 18x + trailing (TTM) 79x), scenarios: 30.7x / 36.4x / 42.0x (bear / base = reference held flat / bull), EV/EBITDA 19.36x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$18.687.34xyesBV/sh $26.43, ROE (TTM) 6.5%, ke 9.3%
Two-Stage Excess ReturnAsset$15.478.86xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$84.101.63xyesRev $3.2B, growth -0% (input: historical growth; tapered), Terminal P/S: 5.5x / 6.5x / 7.5x (bear / base = today's held flat / bull, cap 8x)
Growth-Adjusted P/ERelative——no—
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$21.016.52xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.54B × (1−1%) / WACC 8.0% → EPV (no growth)
Residual IncomeAsset$15.039.12xyesBV $26.43 + 5yr PV of (ROE (TTM) 6.5% − Kₑ 9.3%) × BV; BV grows 4.2%/yr
Graham NumberAsset$32.174.26xyes√(22.5 × EPS $1.74 × BVPS $26.43) — Graham's conservative floor
EV/EBITDA RelativeRelative$30.544.49xyesEBITDA $0.66B × sector EV/EBITDA 12.0x
FCF YieldEarnings$14.139.70xyesFCF $505.3M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$9.0115.21xyesSBC-adj FCF $0.43B (FCF $0.51B − SBC $0.07B) capitalized at Kₑ
Ben Graham FormulaEarnings$1.4693.85xyesEPS $1.74 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median)
ROIC-Justified P/BAsset$6.2621.89xyesBV $26.43 × (ROIC 1.9% / WACC 8.0%) (excluded from median)
P/Sales SectorRelative$52.802.60xyesRevenue $3.24B × sector P/S 2.5x
PEG Fair ValueRelative——no—
Earnings YieldEarnings$18.817.28xyesEPS $1.74 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$3.2b
Net debt / NOPAT (after-tax)6.62x
Net debt / operating income (pre-tax)6.55x
Interest coverage2.5x
Share count CAGR (dilution)2.9%
Burning cashno

Bullet Takeaways

Bull Case

Begin with the loudest objection, because it frames the whole bet: every standard valuation method says Entegris is expensive, and the inversion implies the price needs durable compounding over a very long horizon. That is the risk in plain terms. The question is whether the data supports paying it, and the nature of the business argues it might. Entegris sells the materials and filtration consumables that go into making semiconductors, and unlike equipment, consumables are bought every time a wafer runs. As chips move to more advanced nodes, the contamination-control requirements rise, which means more Entegris content per wafer. The company's Advanced Purity Solutions segment is built around ensuring critical materials meet exacting purity standards (ENTG FY2025 10-K, accession 0001101302-26-000012), and that is precisely the value that scales with node complexity rather than with the capital-spending cycle alone.

The first quarter showed the model converting. Revenue of $811.9 million rose 5 percent and beat slightly, but the margins are the story: adjusted EBITDA of $226.1 million yielded a 27.8 percent margin, operating margin improved to 17.4 percent from 15.8 percent a year earlier, and adjusted EPS of $0.86 beat the $0.75 consensus by more than 15 percent. Management attributed the strength to liquid filtration products and momentum in advanced deposition and selective etch for new technology nodes. The AI-driven node migration is the secular tailwind, increasing demand for filtration, CMP, and etch consumables, and Entegris's largest customer relationship has grown alongside AI-related demand.

The financial trajectory is improving even with the leverage. Free cash flow of $143.5 million in the quarter was a large step up from $32.4 million a year earlier, long-term debt fell to $3.65 billion from $3.98 billion, and management expects net leverage to reach roughly 3 times by the end of 2026 from 3.6 times. As the balance sheet de-risks, value shifts toward the equity. The discounted-future-market-cap method lands near $104 and the exit-multiple DCF near $131, both far above the static frames, reflecting the growth the consumables franchise can deliver. Analysts are constructive, with a buy-leaning consensus and targets up to $205, and Mizuho at $180. The bull case is a high-margin, recurring-revenue materials supplier levered to the most durable trend in semiconductors, with deleveraging and AI demand both working in its favor.

Bear Case

The bear case is structural, and it starts with the capital structure because that is where the fragility concentrates. Entegris carries net debt of about $3.3 billion against trailing operating income, with interest coverage of only about 2.4 times and just $442.7 million of liquid assets on hand. Net leverage at 3.6 times is high for a company whose revenue is tied to the cyclical semiconductor industry, and the equity sits as a thin layer on top of that debt. The deleveraging plan toward 3 times by year-end is encouraging, but it depends on free cash flow holding up, and free cash flow in this business swings with the chip cycle. If demand softens, the cash that is supposed to retire debt instead has to defend operations, and a leveraged balance sheet in a downturn is exactly the wrong combination.

The second pressure is the international-trade exposure that the company itself flags. Entegris's business and operating results are heavily dependent on international trade: it imports raw materials and finished goods into the U.S. and exports products from the U.S., and it notes government efforts to encourage local operations and sourcing in countries like Korea and China, including efforts to grow local competitors and require local manufacturing (ENTG FY2025 10-K, accession 0001101302-26-000012). For a materials supplier whose customers and supply chain span the U.S., China, Korea, and Taiwan, export controls, tariffs, and localization mandates are direct threats to both revenue and cost, and they sit entirely outside management's control.

The third issue is the valuation itself, which leaves no room for either risk to materialize. The price of $178.78 (June 27, 2026) implies a compounding horizon above twenty years, and no valuation family reaches it. The asset and earnings-power methods are an order of magnitude below the price: the simple excess-return method near $19, residual income near $15, earnings power value near $20, all reflecting that trailing ROE of about 6.5 percent sits below the 9.3 percent cost of equity. Trailing growth has been roughly flat, so the premium rests entirely on the AI-node-migration thesis continuing without interruption. Pay above twenty years of implied durability for a leveraged, trade-exposed materials supplier and you are underwriting a perfect cycle, a cooperative trade environment, and on-schedule deleveraging all at once.

Valuation

Entegris is a stark durability premium: no valuation family reaches the price, which is rich on assets, earnings power, peers, and even forward growth. At $178.78 the implied multiple is about 61 times operating income with a durability horizon above twenty years, computed at a high cost of capital reflecting the leverage.

The X-ray method set tells the story. The growth methods come closest but still trail: the discounted-future-market-cap method near $104 and the exit-multiple DCF near $131, both on roughly flat trailing growth, with the exit multiple itself a high 46 times EV/EBITDA. The relative-valuation read at $72 sits on a blended P/E distorted by a 103 times trailing multiple. The static frames collapse: the simple excess-return method near $19, the two-stage version near $15, residual income near $15, the Graham number near $32, and earnings power value near $20. The 6.5 percent trailing ROE against a 9.3 percent cost of equity is why the excess-return cushion is negative.

The honest synthesis is that the static valuation says Entegris is expensive by every measure that does not assume sustained high growth, and the growth itself has been roughly flat recently, so the premium rests on the AI-node-migration thesis and on margin expansion continuing. The improving free cash flow and deleveraging support a higher equity value over time as financial risk falls, but the gap between the price and the asset and earnings floors is enormous. The analyst targets up to $205 underwrite the secular case; the X-ray floors near $15 to $32 are what the price would test if the cycle turns or trade frictions bite. This is a high-quality consumables franchise priced for a flawless continuation of the current cycle.

Catalysts

The first-quarter 2026 report on April 30 was the most recent catalyst. Revenue of $811.9 million rose 5 percent and beat slightly, adjusted EPS of $0.86 beat the $0.75 estimate by more than 15 percent, adjusted EBITDA margin reached 27.8 percent, and operating margin improved to 17.4 percent on liquid filtration and advanced deposition and etch demand. Free cash flow of $143.5 million was a large improvement, and second-quarter revenue guidance pointed to about $830 million at the midpoint. The earnings beat was partly offset by softer guidance in the market's read, so the next print is the test of whether the AI-driven consumables momentum accelerates.

The central financial catalyst is deleveraging. Long-term debt fell to $3.65 billion from $3.98 billion a year earlier, net leverage was 3.6 times at quarter-end, and management expects roughly 3 times by the end of 2026, so each quarter of debt paydown shifts value toward the equity. The operating catalysts are AI-driven node migration lifting demand for filtration, CMP, and etch consumables, and the trajectory of the company's largest customer relationships tied to advanced chips. The chief risk to monitor is international trade, given the company's heavy dependence on imports and exports across the U.S., China, Korea, and Taiwan and its exposure to localization mandates and export controls. Analyst sentiment is constructive, with a buy-leaning consensus, a median target near $162.50, and bulls up to $205 and Mizuho at $180.

Sources: IndexBox ENTG Q1 2026 results, Investing.com Q1 2026 slides, Simply Wall St deleveraging and CFO, MarketBeat ENTG forecast.

Peer Cohorts (Per Segment, With Filing Citations)

Materials Solutions (MS) (reported)

Advanced Purity Solutions (APS) (reported)

Methodology Note

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.

View the full interactive ENTG report on boothcheck