Entegris Q3 Earnings: Can NasdaqGS:ENTG Hit Its $0.63 EPS Target?

in EARNINGS/INVESTING IDEAS by

Entegris, Inc. (NasdaqGS:ENTG) is scheduled to report Q3 earnings results before markets open for trading on October 22, 2020.

The company is expected to report earnings of $0.63/share on revenue of $461.8 million. The consensus earnings per share (EPS) of $0.63/share is based on a poll of 10 analysts and represents a growth in eps of 25.5% over the same quarter last year, when the company reported earnings of $0.50/share.

The revenue forecast of $461.8 million based on a poll of 9 analysts implies a year-over-year (YoY) growth in revenue of 17.2%. Last year the company reported $394.1 million in revenue for the quarter.

Expected to report EPS growth of 25.5% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $461.79 $394.15 17.2%
EPS $0.63 $0.50 25.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.

What are your expectations from Entegris, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.48 $0.60 23.7% Beat
Q1, 2020 $0.51 $0.55 7.8% Beat
Q4, 2019 $0.54 $0.55 1.2% Beat
Q3, 2019 $0.45 $0.50 10.5% Beat
Q2, 2019 $0.43 $0.39 −9.2% Missed
Q1, 2019 $0.47 $0.50 6.7% Beat
Q4, 2018 $0.47 $0.47 1.1% Beat
Q3, 2018 $0.49 $0.46 −7.1% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 27, 2020, the stock price reacted by increasing 8.3%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 23, 2020 $62.63 $67.84 8.3% Increase
April 21, 2020 $51.68 $51.05 −1.2% Decline
February 4, 2020 $52.40 $56.72 8.2% Increase
October 24, 2019 $47.62 $47.98 0.8% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.35, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.35 implies a 0.9% chance of earnings manipulation.

Fundamentals And Technical Analysis

Entegris, Inc. is currently trading at $81.02/share, down −0.5% for the day. The company is trading at approximately 95.2% of its 52-week high of $85.14/share. The company’s stock price is up 19.4% since the last earnings report and down −3.4% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 67.10 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:ENTG Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 48.07 and a forward P/E multiple of 34.13.

Entegris, Inc.’s current share price also implies a price-to-book (P/B) multiple of 8.87. The following table summarizes some other key fundamental ratios:

Data as of October 20, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 27, 2020
Stock Price (Current) $81.02
P/E Ratio 48.1x
P/E Ratio (Fwd) 34.1x
PEG Ratio −2.6
Total Debt / Total Capital 10.1%
Levered Free Cash Flow $196.2 million
EV / EBITDA 24.2x

Finbox

Entegris, Inc. is a large-cap stock with a market capitalization of $10.923 billion and a total enterprise value of $11.626 billion. The company operates in the Information Technology sector and the Semiconductors & Semiconductor Equipment industry.

Entegris, Inc. develops, manufactures, and supplies microcontamination control products, specialty chemicals, and advanced materials handling solutions for manufacturing processes in the semiconductor and other high-technology industries in North America, Taiwan, South Korea, Japan, China, Europe, and Southeast Asia. It operates through three segments: Specialty Chemicals and Engineered Materials (SCEM); Microcontamination Control (MC); and Advanced Materials Handling (AMH). The SCEM segment offers high-performance and high-purity process chemistries, gases, and materials, as well as delivery systems to support semiconductor and other advanced manufacturing processes. The MC segment provides solutions to filter and purify critical liquid chemistries and gases used in semiconductor manufacturing processes and other high-technology industries. The AMH segment develops solutions to monitor, protect, transport, and deliver critical liquid chemistries, wafers, and other substrates for application in the semiconductor and other high-technology industries. The company’s customers include semiconductor device manufacturers, semiconductor equipment makers, gas and chemical manufacturing companies, wafer grower companies, and manufacturers of high-precision electronics; and flat panel display equipment makers, materials suppliers and panel manufacturers, and manufacturers of hard disk drive components and devices. It also serves manufacturers and suppliers in the solar and life science industries, electrical discharge machining customers, glass and glass container manufacturers, aerospace manufacturers, and manufacturers of biomedical implantation devices. The company was founded in 1966 and is headquartered in Billerica, Massachusetts.

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