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

In the published model solve dated 2026-Q2, anchored at $139.99, Entegris, Inc. (ENTG) is priced for today's economics sustained for ~19.8 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/ENTG

Headline

What The Price Assumes (Inversion)

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

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 13.3% cost of capital; growth searched up to the 25% self-funding ceiling.

How unusual the bet is: elevated (limited comparison data)

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits 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.

Families that call it expensive: Asset, Earnings, 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=11)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Fabs take roughly 62% of what Entegris sells, and the larger of its two reported segments, Advanced Purity Solutions, turned in $463.6 million of net sales in the first quarter of 2026 against $351.1 million for Materials Solutions.
• What the price asks of margins is the stretch: company-wide operating margins near 32.8%, against roughly 15.5% today, on revenue that has gone sideways for a year.
• Gross margin is the line to watch when second-quarter results land on August 4, 2026, because a January 2026 change to depreciation schedules is expected to add about 52.4 million dollars to it across the year.

Bull Case

Take the objection first, because it is the honest starting point. A materials supplier to the semiconductor industry, in a year when its revenue went sideways, priced at roughly 46 times operating income, looks like a cyclical wearing a compounder's clothes. The test of that is not the multiple. It is what actually gets consumed.

Roughly 62% of Entegris revenue goes to fabs. Fabs buy filters, slurries, deposition chemistries and wafer carriers on a schedule set by how many wafers are physically running, not by when a capital-equipment order gets signed. The company frames its own position the same way in its annual report: Our solutions are increasingly specified into our customers' manufacturing processes and tailored to their unique process conditions and technical roadmaps. Specified-in is a duller phrase than moat and a more useful one. A chemistry qualified into a customer's process step does not get swapped on price, because requalifying it costs the customer yield and calendar time.

The first quarter of 2026 shows what that looks like in the numbers. Advanced Purity Solutions, the filtration and contamination-control half, grew net sales to $463.6 million from $433.9 million, up 7%, and segment profit to $133.6 million from $108.1 million. Materials Solutions grew more slowly, to $351.1 million from $341.4 million, and its segment profit barely moved, $75.9 million against $75.0 million. Gross margin came in at 46.9%, up 0.8 percentage points on the year. Two segments, one of them carrying the operating leverage.

They are not run as separate companies, which is the part a single-product supplier cannot copy. The annual report describes how certain of our formulated cleaning chemistry products are developed by our MS segment with collaboration from our filtration expertise in our APS segment, then packaged in the company's own containers and connectors and delivered as one system. That integration shows up where it counts. UCTT ran an operating margin of negative 5.3% on its most recent filed year and ICHR negative 3.8%; MKSI, the strongest of the three, earned 13.9%. Entegris earned about 15.5% on a trailing basis. When two of the closest listed comparables cannot clear breakeven at the operating line, the difference in who gets specified in is doing real work.

Placement matters here because the chemistry has to travel and the customer has to be able to walk into the plant. Entegris built next to demand rather than shipping into it: we invested in our KSP manufacturing facility in Taiwan and a new research center in South Korea to collaborate locally on solutions for our customers' yield, reliability and performance, alongside a new manufacturing site in Colorado Springs. The domestic build carries public money with it, since the company has entered into a direct funding agreement with the U.S. Department of Commerce to receive a grant under the U.S. CHIPS and Science Act of 2022, with milestones attached to the payments.

None of this requires the industry to boom. It requires wafers to keep running and process steps to keep multiplying as nodes get harder, and it requires the qualified position to hold. The first two are outside the company's control. The third is what the plants in Taiwan, Korea and Colorado were built to protect.

Bear Case

The price is not paying for the business as it runs. It is paying for a version of Entegris that earns company-wide operating margins near 32.8%. The business has run about 15.5%, and the gap is not a rounding difference; it is roughly a doubling.

Ask where that margin would come from and the segment disclosure gets uncomfortable. In the first quarter of 2026 the better half, Advanced Purity Solutions, earned segment profit of $133.6 million on $463.6 million of net sales, and Materials Solutions earned $75.9 million on $351.1 million. Those are segment figures, struck before corporate costs are charged against them. Neither reaches the company-wide margin the price requires, and the price requires it after corporate costs, not before.

Part of this year's improvement is an accounting decision rather than an operating one. As the annual report puts it, In January 2026, we completed an assessment of the useful lives of our property, plant and equipment and adjusted the estimated useful lives of certain property, plant and equipment to better match expected economic lives. The company expects that change to cut 2026 depreciation by $72.9 million and add roughly 52.4 million dollars to gross margin. First-quarter depreciation across the two segments came to $34.1 million against $49.9 million a year earlier. Assets assumed to last longer produce better-looking segment profit without a single additional filter being sold.

The precedent for betting capital on a roadmap step is in the filing, in the company's own words: In the past, we incurred significant impairment charges for capital expenditures related to developing the capability to manufacture shippers and FOUPs for 450 millimeter wafers, a wafer size the industry announced and then abandoned. Spending ahead of a transition that does not arrive is the specific way this business loses money, and the filing warns that the discipline applied during a downturn can bite on the way back up, since cost control or other measures we implement to maintain profitability during such downturns or periods of limited growth may constrain or limit our ability to capitalize on subsequent industry recoveries.

Where the customers sit adds an exposure no amount of process qualification fixes. Our customer base is also geographically concentrated, particularly in Taiwan, Korea, Japan, China and the U.S. The company imports raw materials into the United States and exports finished product back out to those same customers, and the annual report describes tariffs and trade restrictions already raising its costs. A supplier whose value depends on being qualified into a specific fab in a specific country cannot re-route around a policy change quickly.

Then the balance sheet, which is what turns a slow decade into a painful one. Net debt stands at about 3.2 billion dollars, roughly 6.6 times operating profit, with operating income covering the interest bill 2.5 times over. The borrowings sit partly in senior unsecured notes carrying a 3.625% coupon and maturing May 1, 2029, with about $575.0 million of unused capacity on a revolving facility that comes due in 2027. The filing spells out what a missed payment triggers: holders of the Notes and lenders under the Credit Facilities could declare all outstanding principal and interest to be due and payable. Meanwhile the share count is higher than it was four years ago, not lower, so the per-share arithmetic has been working gently against the holder rather than for them.

Put it together and the fragile assumption is specific. It is not that semiconductors stop growing. It is that a multiple of roughly 46 times operating income has to be paid for by a margin the company has never posted, in a business where the customers are concentrated, the capital commitments come years before the revenue, and the interest bill already claims a meaningful slice of what the operations earn.

Valuation

Start with what today's $129.28 commits the buyer to. The market is paying roughly 46 times company-wide operating income. Run that backwards and it implies operating growth held at the fastest pace the company's own cash flow could fund, sustained for something like 18 years. That horizon is sensitive: a single percentage point of growth moves it by about 2.7 years in either direction. Against the sector the multiple sits at the very top of the peer distribution, well past the upper quartile, and among fast-growing companies that reached this position, only about 15% held the pace for a decade.

The methods used to triangulate the price all land underneath it, which is unusual. Peer multiples come closest among the static lenses, with the price sitting near two and a half times that family's central read. The asset-value family and the earnings-power family both sit lower still, the price landing something like seven to eight times above each. The forward-growth methods get nearest of all, at roughly one and a half times, and it is worth being precise about how they get there: the cash-flow method carries today's EV/EBITDA multiple forward unchanged to the exit year, and the market-cap method does the same with today's price-to-sales. Even holding today's pricing constant that far out, they land under the current price.

There is an honest counter to reading those distances as verdicts, and it belongs here rather than in the bull case. The static lenses capitalize what the company earned in a soft year. Net sales for 2025 were $3,196.6 million against $3,241.2 million in 2024, and net income $235.6 million against $292.8 million. Capitalize a trough print as though it were permanent and every no-growth method will look brutal, which is what happens to any supplier read at the bottom of a cycle. Whether 2025 was the floor or the level is the entire disagreement between the two cases above, and the multiple settles nothing about it.

The cohort supplies a check. MKSI reported a gross margin of 46.6% on its most recent filed year, within a fraction of a point of the 46.9% Entegris posted in the first quarter of 2026, and grew revenue 11.5% while Entegris revenue was flat. On the profitability that the specified-in argument rests on, Entegris is ahead of MKSI at the operating line. On growth, it is behind. The premium is being paid for the first of those, on the assumption the second turns.

The balance sheet bounds how much patience the buyer can afford. About 3.2 billion dollars of net debt, at roughly 6.6 times operating profit and 2.5 times covered at the interest line, is not distress, and free cash flow of roughly 505 million dollars comfortably services the coupon. It is also not the balance sheet of a company that can absorb several more flat years without that ratio drifting the wrong way, and a share count moving up rather than down means the equity holder is not being handed anything back while waiting.

Catalysts

Second-quarter results are scheduled for August 4, 2026. Two lines carry the information. The first is whether Advanced Purity Solutions repeated the first quarter's 7% sales growth and 24% segment-profit gain, or whether that was a single strong print. The second is gross margin, which came in at 46.9% in the first quarter, up 0.8 percentage points year over year, and which the January 2026 change to asset useful lives is expected to support across the full year by about 52.4 million dollars. Separating the depreciation effect from genuine mix improvement is the reader's job on the day.

The board declared a quarterly cash dividend of $0.10 per share on July 15, 2026, payable August 19, 2026 to holders of record on July 29, 2026. At this share price the payout is a token rather than a return, and its interest is as a signal: a company worried about its covenants tends not to keep writing dividend checks, however small.

Leadership of the slower half changed hands in June. Daniel Woodland, who ran Materials Solutions, retired on June 1, 2026, and Olivier Blachier moved across from the Chief Strategy and Innovation Officer role to succeed him while keeping the innovation brief. Materials Solutions is where segment profit went nowhere in the first quarter, so the appointment lands on the part of the business that needs the change. Separately, the company announced a non-exclusive cross-licensing arrangement covering EUV lithography materials with JSR Corporation and Inpria Corporation in May, which touches the patterning chemistries that sit inside the Materials Solutions line.

Peer Cohorts (Per Segment, With Filing Citations)

Materials Solutions (MS) (reported)

• DD (DUPONT DE NEMOURS, INC.)
• FY2025 10-K: …expertise, supported by a portfolio of established brands, to advance new product and solution development. Details on Diversified Industrials 2025 net sales, by business and geographic region, are as follows: Building Technologies provides solutions for the non‑residential, residential, and repair‑and‑remodel…
• FY2025 10-K: …practices, pricing strategies, customer services and a changing regulatory landscape. The Company provides its customers with extensive support and technical and testing services, in addition to new product development informed by specific industry technological, sustainability and regulatory needs and evolving…
• CBT (Cabot Corporation)
• FY2025 10-K: …that demand; ii) changes in raw material costs and our ability to adjust the sales price for our products commensurate with changes in raw material costs; iii) changes in pricing and product mix, which includes customer pricing as well as the mix of products sold or the region in which they are sold; iv) global and…
• FY2025 10-K: …of any of these customers, or a significant reduction in volumes sold to them, could have a material adverse effect on the segment until such business is replaced. Under appropriate circumstances, we have entered into supply arrangements with certain customers, the typical duration of which is one year. These…
• EMN (EASTMAN CHEMICAL CO)
• FY2025 10-K: …polymers, films, and plastics with differentiated performance properties for value-added end-uses in transportation; durables and electronics; building and construction; medical and pharma; and consumables end-markets. Key technology platforms for this segment include cellulosic biopolymers, copolyesters, and PVB and…
• FY2025 10-K: …use) emissions by 30 percent by 2035, measured from the Company's 2017 baseline year, in order to achieve net-zero operations by 2050, and to innovate to provide products that enable energy savings and GHG emissions reductions to customers and end-users. Eastman focuses on the triple challenge of climate change,…
• APD (AIR PRODUCTS AND CHEMICALS, INC.)
• FY2025 10-K: …product to our industrial gas customers through either our on-site or merchant supply mode depending on various factors, including the customer's volume requirements and location. Each sale of gas supply mode is described below: • On-site Gases - This supply mode serves customers primarily in the energy production…
• FY2025 10-K: …revenue is generated from our sale of gas customers within these regional industrial gases segments. We distribute product to our industrial gas customers through either our on-site or merchant supply mode depending on various factors, including the customer's volume requirements and location. Each sale of gas supply…
• LIN (LINDE PLC)
• FY2025 10-K: Inc., Zamalight PLC, Zamalight Holdco LLC and Zamalight Subco, Inc. dated as of June 1, 2017 (Filed as Exhibit 2.1 to Praxair, Inc.'s Current Report on Form 8-K dated June 1, 2017, Filing No. 1-11037, and is incorporated herein by reference.) 2.1a Amendment No. 1, dated August 10, 2017, to the Business Combination…
• FY2025 10-K: …methods for industrial gases: (i) on-site or tonnage; (ii) merchant or bulk liquid; and (iii) packaged or cylinder gases. These distribution methods are often integrated, with products from all three supply modes coming from the same plant. The method of supply is generally determined by the lowest cost means of…

Advanced Purity Solutions (APS) (reported)

• UCTT (Ultra Clean Holdings, Inc.)
• FY2025 10-K: …cycles within the semiconductor industry. • Continue to selectively pursue strategic acquisitions . We will continue to consider strategic acquisitions that enable us to improve our financial model, expand our geographic presence, secure new customers and diversify into adjacent markets as well as broaden our…
• FY2025 10-K: …segment provides ultra-high purity parts cleaning, process tool part recoating, surface encapsulation and high sensitivity micro contamination analysis primarily for the semiconductor device makers and WFE markets. We ship a majority of our products and provide most of our services to U.S. registered customers with…
• ICHR (Ichor Holdings, Ltd.)
• FY2025 10-K: …sales. Additional focus is being placed on expanding our engagement in this industry as a source for future revenue growth. Our sales and marketing efforts focus on fostering close business relationships with our customers. As a result, we locate many of our account managers near the customers they support. Our sales…
• FY2025 10-K: …are: 3 Table of Contents Grow Our Market Share within Existing Semiconductor Customer Base We intend to grow our position within our existing semiconductor customers by continuing to leverage our specialized engineering talent, early collaboration approach with OEMs to foster long-term relationships, and expanded…
• MKSI (MKS INC)
• FY2025 10-K: …products is cyclical and highly competitive. Principal competitive factors include product quality, performance and price, historical customer relationships, breadth of product line, ease of use, manufacturing capabilities and responsiveness, and customer service and support. Although we believe that we compete…
• FY2025 10-K: …by 15 state-of-the-art global technology centers, which are used to conduct extensive research and development in order to anticipate future industry requirements. We continue to develop our products as we strive to meet our customers' evolving needs. We have developed, and continue to develop, new products to…
• CBT (Cabot Corporation)
• FY2025 10-K: …sale of specialty carbons and products for battery materials applications with a mix of global and regional companies. In recent years, a number of these companies that operate regionally have increased the export of products outside their region of manufacture. For fumed alumina, we compete primarily with one…
• FY2025 10-K: …conductive additives and other materials for battery applications, and inkjet dispersions for high-speed industrial printing applications, including packaging and graphic arts. The recent investments we have made for growth in this segment, including with respect to these specific areas of focus, are described below…

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.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• 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.