Ichor Holdings, Ltd. (ICHR): what the price assumes

In the published model solve dated 2026-Q2, anchored at $62.26, Ichor Holdings, Ltd. (ICHR) is priced for today's economics sustained for ~23.0 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 2026-06-27.

Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/ICHR

Headline

FieldValue
TickerICHR
CompanyIchor Holdings, Ltd.
Current price$62.26/sh
CompositionSingapore 46% / United States of America 31% / Europe 10% / Other 13%

What The Price Assumes (Inversion)

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

FieldValue
Inversion basiswhole-company
Operating margin (value-band context)11.0%
Operating margin (mid-cycle)5.2%
Margin expansion (value-band)+5.8pp
Trailing margin (depressed year)-3.8%
Must persist for23.0y
Multiple paid43x mid-cycle operating income

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 15% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~3.5 years.

Reconcile: at the x-ray's 9.3% required return this reads ~8.7 years; the models below use their own rates.

How unusual the bet is: elevated

ReferenceValue
vs own history-0.13σ
sustained it ~10 years at this level15%
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple; asset-based/growth-DCF land below the price.

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
Asset3.41x2expensive
Earnings—0—
Relative0.45x3justifies
Growth9.78x2expensive

Families that justify the price: Relative Families that call it expensive: Asset, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.7%); the inversion above states its own rate.

Per-Model Detail (n=7)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$3.3918.37xyesReference only (OCF-based, capex excluded): OCF $0.0B
DCF Exit MultipleGrowth$0.00—noNegative/zero FCF or EBITDA — equity value floored at $0
Relative ValuationRelative$138.590.45xyesP/S fallback (negative EPS): Sector P/S 5.0x × TTM revenue — excluded from consensus
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$19.303.23xyesReference only (book value floor): BV/sh $19.30, ROE negative
Two-Stage Excess ReturnAsset$17.373.58xyesReference only (book value with convergence): BV/sh $19.30, ROE converges to ke
Discounted Future Market CapGrowth$51.961.20xyesRev $1.0B, growth 8% (input: historical growth; tapered), Terminal P/S: 1.9x / 2.2x / 2.6x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$0.00—noNegative/zero EPS — earnings-based value floored at $0
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$1.3745.45xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.01B × (1−21%) / WACC 8.6% → EPV (no growth) (excluded from median)
Residual IncomeAsset——no—
Graham NumberAsset——no—
EV/EBITDA RelativeRelative$4.9712.53xyesEBITDA $0.02B × sector EV/EBITDA 16.0x
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings——no—
ROIC-Justified P/BAsset$0.49127.06xyesBV $19.30 × (ROIC 0.2% / WACC 8.6%) (excluded from median)
P/Sales SectorRelative$138.590.45xyesRevenue $0.96B × sector P/S 5.0x
PEG Fair ValueRelative——no—
Earnings YieldEarnings——no—
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$33.0m
Net debt / NOPAT (after-tax)0.83x
Net debt / operating income (pre-tax)0.66x
Interest coverage7.5x
Share count CAGR (dilution)4.5%
Burning cashno

Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 5.2%); the trailing year was depressed.

Bullet Takeaways

Bull Case

Read the price against the methods and the picture is a cyclical company at the bottom of its cycle, which is exactly when the trailing numbers mislead. At $98.60 (June 27, 2026), the price is justified by the peer-multiple and forward-growth lenses while only the asset lens says expensive, and that split makes sense once you understand what Ichor is. The company sells the precision gas and fluid-delivery subsystems that go inside the equipment used to make chips, so its revenue rises and falls with the capital spending of the wafer-fab-equipment makers. Trailing earnings show a small operating loss because the industry was in a downcycle, but that is the trough, not the run rate. Valuing Ichor on trailing earnings is like valuing a homebuilder at the bottom of a housing recession.

The recovery is no longer a forecast; it is showing up in the prints. First-quarter 2026 revenue rose 15% sequentially to $256.1 million, beating expectations, with gross margin recovering to 12.6%, and management guided second-quarter revenue to $290 to $310 million with a return to positive GAAP earnings. That sequential acceleration is the operating leverage of the business turning back on: as utilization rises across a largely fixed manufacturing base, incremental revenue converts to margin quickly, which is why the normalized through-cycle margin sits meaningfully above the depressed trailing figure. Management frames this as the start of a sustained industry upcycle driven by structural technology transitions and capacity investment in wafer-fab equipment.

The longer-term levers add to the cyclical recovery. Ichor is working to grow its higher-value content per tool and to expand its commercial-space business from under 5% of revenue toward 10%, and it anticipates an EUV-related market recovery building into late 2026. The balance sheet can carry the company through the cycle: net debt of about $33 million sits at a fraction of normalized operating income, with interest coverage above seven times. The bull case is straightforward for a cyclical: the upcycle is underway, the company is guiding to profitability, and the methods that credit forward earnings, not the trailing loss, are the relevant ones.

Bear Case

The competitive position is more precarious than a recovery story admits, and it starts with customer concentration. Ichor is a subsystem supplier to a small number of large wafer-fab-equipment makers, which means a handful of customers determine its revenue. That concentration is the source of its scale, but it is also a structural vulnerability: the customers are far larger than Ichor, they design the tools Ichor's subsystems go into, and they hold the power in the relationship. They can dual-source, in-source, or squeeze pricing, and a subsystem supplier has limited leverage to resist. Ichor's screened peers, Ultra Clean Holdings, Benchmark Electronics, Plexus, and others, occupy the same contract-manufacturing and subsystem tier, competing for the same OEM business on cost and capability, which keeps margins structurally thin even in good years.

The thin-margin reality is the bear's core point, because it limits how good the good times get. Even in the recovering first quarter, gross margin was only about 12.6%, and the normalized through-cycle operating margin sits in the low single digits. This is not a high-margin technology business; it is a precision manufacturer whose economics resemble contract manufacturing more than chip design. At a thin operating margin, the business needs strong volume to generate meaningful profit, and that volume depends entirely on a capital-spending cycle Ichor does not control. The cycle that is recovering now will turn again, and when it does, the same operating leverage that lifts earnings on the way up cuts them on the way down.

The valuation already credits the recovery, which leaves little margin for the cycle to disappoint. The price sits far above where the asset and earnings-power lenses land, the book-value floor is about $19.30 per share and the normalized methods sit well below the price, because they will not extrapolate the upcycle indefinitely. The price is supported only by the relative-multiple and forward-growth lenses, and those credit a sustained recovery in wafer-fab-equipment spending. The reliability of that read is low precisely because cyclical normalization is hard to time. The share count is also growing at about 4.5% a year, diluting the per-share claim on the recovery. The downside is not insolvency; the balance sheet is sound. It is that a thin-margin, customer-concentrated cyclical priced for a sustained upcycle has both the cycle and the negotiating power of its customers as risks the current price does not fully reflect.

Valuation

Ichor cannot be valued on its trailing earnings, and the report normalizes accordingly. The trailing operating result is a small loss, so the price is read against a normalized mid-cycle margin of about 5.2% rather than the depressed actual, and even that is flagged as a low-reliability estimate because timing a cyclical normalization is inherently uncertain. The implied assumption in the price is essentially that the wafer-fab-equipment upcycle is sustained, lifting Ichor's volume and margin back toward and beyond mid-cycle. That is a recovery bet, not a steady-state valuation.

How far the price sits from the methods depends entirely on whether you believe the trough or the recovery. The asset and earnings-power lenses, anchored on a book value of $19.30 per share and the company's currently negative returns, land far below the price, which is what "expensive on assets" means for a company earning nothing on its capital at the trough. The relative-multiple method, using a sector price-to-sales multiple on trailing revenue, lands near $139, above the price, and the forward-market-cap method lands near $82, close to it. The pattern says the price is supported by the lenses that credit forward revenue and sector multiples, not by the static ones. The right peer comparison is the subsystem-and-contract-manufacturing cohort, Ultra Clean and its tier, where thin margins and cyclical revenue are the norm and multiples reflect that.

Solvency is the reassuring part and bounds the downside. Net debt of about $33 million is small against normalized operating income, interest coverage runs above seven times, and the company holds roughly $89 million of liquid assets. The balance sheet can carry Ichor through the cyclical swings without distress. The mark against the capital picture is the share count growing at about 4.5% a year. The decisive number here is not a clean valuation output; it is the gap between a price that assumes a sustained upcycle and a normalized margin in the low single digits, which means even a successful recovery produces only modest through-cycle profitability, and a stalled recovery exposes how much of the price rests on the cycle continuing.

Catalysts

Ichor reported first-quarter 2026 results on May 4, 2026, and beat expectations by a wide margin. Revenue rose 15% sequentially to $256.1 million, ahead of the roughly $236 million expected, with GAAP earnings per share of $(0.07) and non-GAAP earnings of $0.15, a large positive surprise. Gross margin recovered to about 12.6%, and management characterized the quarter as the start of a sustained industry upcycle driven by structural technology transitions and capacity investment in wafer-fab equipment.

The forward signal is the second-quarter guide. Management expects revenue of $290 to $310 million and a return to positive GAAP and non-GAAP earnings, citing accelerating customer delivery timelines and another quarter of sequential improvement across revenue, gross margin, and earnings. The company also pointed to longer-term drivers: growing its commercial-space business from under 5% toward 10% of revenue, and an anticipated EUV-related market recovery building into late 2026. The watch items are the durability of the wafer-fab-equipment upcycle, the pace of margin recovery as volume rises, and whether the second-quarter return to profitability holds, because the entire valuation rests on the recovery being sustained rather than a single strong quarter.

Peer Cohorts (Per Segment, With Filing Citations)

Ichor Holdings (consolidated) (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.

Sources

Ichor Holdings Q1 2026 earnings release, May 2026

View the full interactive ICHR report on boothcheck