UFP Technologies, Inc. (UFPT): what the price requires
At today's price, UFP Technologies, Inc. (UFPT) is priced for +18.5% growth. 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: 2026-07-14 · Exported: 2026-07-17 · Source: https://boothcheck.com/report/UFPT
Headline
| Field | Value |
|---|---|
| Ticker | UFPT |
| Company | UFP Technologies, Inc. |
| Current price | $239.34/sh |
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 | 4.2% |
| Operating margin today | 15.5% |
| Margin compression implied | -11.3pp |
| Implied growth | 18.5% |
| Multiple paid | 21x operating income |
The operating-margin requirement is derived from the framework's value band at year 6, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 9.3% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.1pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.02σ |
| cohort percentile (of 112 peers) | 47 |
| sustained it ~5 years at this level | 42% |
| 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 | 2.27x | 5 | expensive |
| Earnings | 2.67x | 5 | expensive |
| Relative | 1.29x | 5 | expensive |
| Growth | 0.89x | 3 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.6%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $270.44 | 0.89x | yes | FCF base $0.1B, growth 13% (input: historical growth), terminal g 4.0%, WACC 8.6%, 6yr projection |
| DCF Exit Multiple | Growth | $283.31 | 0.84x | yes | Exit EV/EBITDA: 18.2x / 20.2x / 22.2x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $211.80 | 1.13x | yes | P/E 24x (static sector reference · 2026-04), scenarios: 19.8x / 24.0x / 28.2x (bear / base = reference held flat / bull), EV/EBITDA 16x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $95.13 | 2.52x | yes | BV/sh $56.27, ROE (TTM) 15.6%, ke 9.3% |
| Two-Stage Excess Return | Asset | $122.14 | 1.96x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $214.93 | 1.11x | yes | Rev $0.6B, growth 13% (input: historical growth; tapered), Terminal P/S: 2.5x / 3.1x / 3.6x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $105.72 | 2.26x | yes | EPS $8.81, growth 12% (input: historical EPS growth), PEG=2.35 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $57.33 | 4.17x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.07B × (1−19%) / WACC 8.6% → EPV (no growth) |
| Residual Income | Asset | $124.61 | 1.92x | yes | BV $56.27 + 5yr PV of (ROE (TTM) 15.6% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $105.62 | 2.27x | yes | √(22.5 × EPS $8.81 × BVPS $56.27) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $185.52 | 1.29x | yes | EBITDA $0.10B × sector EV/EBITDA 16.0x |
| FCF Yield | Earnings | $89.68 | 2.67x | yes | FCF $78.4M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $76.69 | 3.12x | yes | SBC-adj FCF $0.07B (FCF $0.08B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $233.99 | 1.02x | yes | EPS $8.81 × (8.5 + 2×11.6%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $21.19 | 11.29x | yes | BV $56.27 × (ROIC 3.2% / WACC 8.6%) |
| P/Sales Sector | Relative | $312.27 | 0.77x | yes | Revenue $0.61B × sector P/S 4.0x |
| PEG Fair Value | Relative | $153.23 | 1.56x | yes | EPS $8.81 × (PEG 1.5 × growth 11.6% (input: historical EPS growth)) → PE 17.4x |
| Earnings Yield | Earnings | $95.24 | 2.51x | yes | EPS $8.81 / 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 debt | $117.7m |
| Net debt / NOPAT (after-tax) | 1.54x |
| Net debt / operating income (pre-tax) | 1.25x |
| Interest coverage | 9.8x |
| Share count CAGR (dilution) | 0.5% |
| Burning cash | no |
Bullet Takeaways
- UFP Technologies makes custom engineered components for medical-device makers, in markets like minimally invasive surgery, orthopedics, and wound care, and the business has shifted decisively toward medical, which reached $143.4 million of Q1 2026 sales, up 5.9%.
- The defining customer relationship is Intuitive Surgical: UFP extended and expanded its supply agreement through December 31, 2029, adding contracted-revenue visibility to the robotic-surgery franchise.
- The risk to weigh is concentration: the top ten customers were 68.8% of 2025 net sales, with Intuitive Surgical and Stryker the two largest, per the filing, so the franchise quality and the dependency are the same fact.
Bull Case
The earnings trajectory tells a clean story of a company that has remade itself into a medical-device supplier. Q1 2026 medical sales rose 5.9% to $143.4 million while non-medical revenue fell 15.0% to $10.8 million, so the medical mix is now the overwhelming majority of the business and growing while the legacy non-medical work fades. The 10-K lists the segments UFP serves, "minimally invasive surgery, infection control, orthopedics, interventional & surgical, surfaces & support, therapeutics, diagnostics, wound care, and biopharma", and describes products that "often are custom-made to its customers' specifications". Custom-engineered medical components designed into a device carry switching costs a commodity supplier never has: once UFP's part is specified into an approved medical device, replacing it means re-validation the customer would rather avoid.
The Intuitive Surgical relationship is the franchise's anchor and its clearest growth signal. In late February 2026 UFP extended and expanded its manufacturing supply agreement with Intuitive through December 31, 2029, a longer-term, higher-volume partnership that adds contracted-revenue visibility. Robotic surgery is one of the fastest-growing areas in medical devices, and being the designed-in component supplier to the category leader is a position that compounds with the customer's own volume growth. Q1 highlighted strength in robotic surgery, patient surfaces and support, and interventional and surgical segments, with capacity additions in the Dominican Republic coming in Q2.
The growth has been amplified by disciplined acquisition. In 2025 UFP acquired Universal Plastics & Engineering (UNIPEC) and Techno Plastics Industries (TPI) to add tight-tolerance film components and thermoplastic molding for the medical-device market, deepening the capabilities it can offer the same medical customers. Q1 2026 net income rose to $17.5 million on sales of $154.2 million, with GAAP EPS of $2.24. A company that is both growing the medical core organically and buying complementary capabilities, while keeping leverage modest, is the profile the price is paying a premium for.
Bear Case
The capital-allocation story has a concentration problem baked into it, and the filing states it without hedging. UFP's top ten customers represented approximately 68.8% of total net sales in 2025, up from 59.3% two years earlier, and two customers, "Intuitive Surgical SARL and Stryker", are the largest. That rising concentration is the flip side of the medical-device success: the same designed-in relationships that create switching costs also mean a large share of revenue sits with a handful of buyers. If Intuitive or Stryker re-sources a program, slows its own volume, or pushes hard on price at the next contract renewal, the impact on UFP is immediate and large. The expanded Intuitive agreement through 2029 is a genuine positive, but it also formalizes the dependency: the customer that most drives the growth is the customer the company can least afford to lose.
The price assumes that concentrated, premium franchise keeps compounding at a premium multiple, and the methods say the premium is real. The price sits well above the asset-value and earnings-power methods, which land at roughly a third to a half of it, because UFP earns a high return on a relatively small capital base and the market capitalizes that quality richly. The bet is that the medical mix, the Intuitive volumes, and the acquisition pipeline together sustain the growth that justifies paying several times book and a rich multiple of current earnings. If medical-device end markets slow or a key program is lost, the multiple compresses fast, because a premium paid for durable growth unwinds quickly when the durability is questioned.
The non-medical decline is a quieter signal worth watching. Non-medical revenue fell 15% in the quarter, and while management is deliberately deemphasizing it, a shrinking segment is still a drag the medical growth has to overcome to hit the company-wide numbers the price implies. The acquisitions add capability but also integration risk and goodwill, and a serial acquirer in a concentrated customer base is only as good as its discipline on price and integration. The balance sheet is sound, with net debt around 1.3 times operating income, so this is not a solvency concern; it is a question of whether a richly valued, customer-concentrated compounder keeps delivering the growth its price requires, with less margin for a single large customer to disappoint.
Valuation
UFP trades at a clear premium, and the methods we use to triangulate make the structure of that premium visible. The asset-value methods land at roughly a third to a half of the price, and the earnings-power anchor sits well below it, because UFP earns a high return on a small capital base that book-value and zero-growth methods cannot credit. The peer-multiple lens lands closer, modestly below to around the price, valuing UFP against medical-device comparables. Only the growth-cash-flow methods reach the price, which tells you the premium is a bet on continued growth, not anything visible in the static asset or earnings frames.
The concrete statement of what has to be true is the medical-growth durability. The price embeds mid-single-digit-or-better operating growth sustained for years, against a company growing medical sales about 6% and shifting its mix steadily toward that higher-quality revenue. The bet is reasonable given the Intuitive contract extension and the designed-in nature of the components, but it is a premium bet: the price is paying for the growth to persist and for the customer concentration not to bite. The peer comparison is the right lens here, against other medical-device suppliers rather than general packaging, and on that basis UFP is valued as a quality compounder, not a bargain.
Solvency is comfortable and frames the bet as one about growth rather than survival. Net debt of about $118 million sits at roughly 1.3 times trailing operating income, with interest coverage above 10 times, modest leverage for a profitable manufacturer funding acquisitions and capacity expansion. The decisive point for this name is not the balance sheet but the concentration: the price requires the medical franchise and its largest customers to keep compounding, and the contracted visibility through 2029 supports that while also defining exactly where the risk sits.
Catalysts
Q1 2026 was a steady quarter built on the medical mix. Net income rose to $17.5 million, up 1.8%, on net sales of $154.2 million, up 4.1%, with GAAP EPS of $2.24 and adjusted EPS of $2.48. The story underneath was the divergence: medical sales up 5.9% to $143.4 million on strength in robotic surgery, patient surfaces and support, and interventional and surgical, while non-medical fell 15.0% to $10.8 million.
The most important recent development is contractual. In late February 2026 UFP extended and expanded its manufacturing supply agreement with Intuitive Surgical through December 31, 2029, a longer-term, higher-volume partnership that adds visibility to the contracted revenue base. On capacity, the company is adding production in the Dominican Republic in Q2 2026 to support medical growth, and it continues to integrate the 2025 UNIPEC and TPI acquisitions.
The catalysts ahead are the ramp of the expanded Intuitive volumes, the contribution from new Dominican Republic capacity, and the pace of medical growth across the robotic-surgery and surgical segments. The non-medical decline and any new acquisition are secondary watch items. Because the franchise is concentrated, the single most informative future data point is each quarter's medical-segment growth, which is the engine the premium valuation depends on.
Peer Cohorts (Per Segment, With Filing Citations)
UFP Technologies (consolidated) (reported)
- ITGR (INTEGER HOLDINGS CORPORATION)
- (no filing in the citation store)
- WST (WEST PHARMACEUTICAL SERVICES, INC.)
- (no filing in the citation store)
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
UFPT Q1 2026 results, May 4 2026 · UFPT disclosures, February 2026 · UFPT disclosures, 2025