Last Update 25 Jan 26

Fair value Increased 24%

ICHR: Fair Value View Balances CEO Transition And Customer Demand Uncertainty

Analysts have raised their average fair value estimate for Ichor Holdings from about US$24.17 to roughly US$29.86. This change reflects recent price target revisions and updated assumptions regarding discount rates, revenue growth, profit margins, and future P/E expectations.

Analyst Commentary

Recent Street research on Ichor Holdings reflects a mix of optimism about the company’s long term positioning and caution around nearer term execution and customer demand patterns. Here is how bullish and bearish analysts are framing the story for investors.

Bullish Takeaways

Bullish analysts have raised their price targets by US$4 to US$11, which signals increased confidence in the company’s long term earnings power and supports a higher fair value framework.
Some of the positive target revisions are tied to updated assumptions for revenue growth and profit margins. This suggests analysts see room for the business model to support stronger profitability over time.
Higher targets also reflect updated P/E expectations, indicating that bullish analysts are comfortable with Ichor trading at a more generous earnings multiple if management delivers on its plans.
Even where targets have been adjusted down, some analysts have maintained positive stock ratings. This points to an underlying constructive view on the company’s ability to execute beyond the latest quarter.

Bearish Takeaways

Bearish analysts have lowered at least one price target to US$30 from US$35 after weak Q4 guidance, which they link to Q3 pull ins from the two largest customers that pulled forward demand.
These analysts highlight projected softness at the third and fourth largest customers, raising concerns about near term revenue visibility and the risk that order volumes could be uneven across key accounts.
Push outs across the highest margin segment are flagged as a headwind for profitability, since delays in richer margin business can weigh on near term earnings and pressure valuation multiples.
The meaningful share price reaction to guidance has been cited as a reminder that execution and customer timing remain critical to supporting higher fair value estimates and justifying raised targets.

What’s in the News

Ichor Holdings issued preliminary unaudited guidance for the first quarter of 2026, indicating expected revenue of at least US$240 million, referenced against the fourth quarter of 2025 revenue (Corporate Guidance, New/Confirmed).
The company revised preliminary unaudited guidance for the fourth quarter of 2025, indicating revenue results are expected to be slightly above the midpoint of the ranges provided on November 3, 2025 (Corporate Guidance, Raised).
Ichor confirmed guidance for the fourth quarter ended December 26, 2025, with expected revenue between US$210 million and US$230 million, with a midpoint of US$220 million, and GAAP diluted EPS in a range from a loss of US$0.33 to a loss of US$0.17, with a midpoint loss of US$0.25 (Corporate Guidance, New/Confirmed).
Chief Executive Officer Jeffrey Andreson informed the Board on October 30, 2025, of his decision to resign, effective November 3, 2025. The Board appointed current Chief Technology Officer Philip Barros as the new CEO on that date, following his long tenure in engineering and leadership roles at the company (Executive Changes, CEO).

Valuation Changes

The Fair Value Estimate has risen meaningfully, moving from about US$24.17 to roughly US$29.86 per share.
The Discount Rate has edged down slightly, from about 11.32% to roughly 11.20%, implying a modest change in the risk assumptions used in the models.
The Revenue Growth assumption has been reduced, from about 6.91% to roughly 5.76%, pointing to more conservative expectations for top line expansion.
The Net Profit Margin assumption has come down significantly, from about 1.86% to roughly 0.81%, indicating a more cautious stance on future profitability.
The Future P/E assumption has increased sharply, moving from about 56.9x to a very large multiple of roughly 156.2x, which materially raises the valuation placed on potential future earnings.

Secular demand growth and government incentives are expanding Ichor's market opportunity, supporting above-industry and more predictable long-term revenue growth.
New proprietary product launches and vertical integration are set to boost margins and diversify revenue through higher content per tool and increased manufacturing efficiency.
Hiring challenges, weak demand, operational issues, and leadership uncertainty are constraining Ichor's growth, margin expansion, and revenue predictability.

Catalysts

About Ichor Holdings

Engages in the design, engineering, and manufacture of fluid delivery subsystems and components for semiconductor capital equipment in the United States and internationally.What are the underlying business or industry changes driving this perspective?

Ongoing digital transformation in industries such as automotive, healthcare, and industrial automation is driving secular demand growth for advanced semiconductor manufacturing; this is expected to support sustained long-term order growth for Ichor's fluid delivery subsystems, positioning the company for above-industry revenue growth as these trends accelerate.
The company is making material progress with the qualification and commercialization of new proprietary products like flow controllers and valves, which expand Ichor's addressable market and increase content per tool, providing a foundation for diversified and higher-margin revenues in future quarters as production ramps.
Vertical integration and ramping of internal manufacturing capacity for critical components are expected to significantly enhance gross margins once hiring and retention issues are resolved-this operational inflection can drive meaningful net margin expansion as new products shift from qualification to scaled commercial production.
Stronger partnerships and increased direct qualifications with wafer fab equipment OEMs and end device manufacturers are improving recurring order visibility and share of wallet, which should lead to greater earnings predictability in future periods.
Government incentives for domestic semiconductor production (e.g., US CHIPS Act) continue to underwrite new fab investments and equipment demand in the US, expanding Ichor's customer base and serving as a catalyst for longer-term top line revenue growth.

Ichor Holdings Earnings and Revenue Growth

Ichor Holdings Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Ichor Holdings's revenue will grow by 6.9% annually over the next 3 years.
Analysts assume that profit margins will increase from -2.2% today to 1.9% in 3 years time.
Analysts expect earnings to reach $21.1 million (and earnings per share of $0.78) by about September 2028, up from $-20.7 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 56.9x on those 2028 earnings, up from -26.7x today. This future PE is greater than the current PE for the US Semiconductor industry at 30.1x.
Analysts expect the number of shares outstanding to grow by 1.76% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 11.32%, as per the Simply Wall St company report.

Ichor Holdings Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent hiring and retention challenges in Ichor's U.S. operations, especially in specialized post-machining and clean room roles, are limiting production capacity and constraining the ramp of internal component supply, restricting both current and potential future revenue growth and delaying needed gross margin expansion.
Revenue growth momentum has recently stalled below the targeted $250 million quarterly run rate due to external factors such as a slowing EUV build, delayed CapEx investments by a major U.S. semiconductor manufacturer, and ongoing weak demand in nontraditional markets like silicon carbide-which could signal customer and end-market concentration risks resulting in revenue volatility.
Despite internal progress with new product qualifications (valves and flow control), the timeline for these proprietary, higher-margin products to significantly improve gross margins is unclear and highly dependent on end-customer production ramps and volume adoption, leaving net margins at risk if these transitions are delayed or underwhelming.
Ichor continues to face thin gross margins (Q2 gross margin at just 12.5%) primarily due to operational execution issues and ongoing external sourcing, with management only cautiously guiding for incremental margin improvement-a condition that exposes the company to heightened downside risk from any further operational, pricing, or cost pressures that could compress net earnings.
With CEO succession underway and a period of leadership uncertainty, the company may experience execution risk or strategic drift at a critical time when scaling internal supply, securing new product wins, and managing external market slowdowns are all essential, potentially impacting both the predictability of future earnings and investor confidence.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $24.167 for Ichor Holdings based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $35.0, and the most bearish reporting a price target of just $18.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.1 billion, earnings will come to $21.1 million, and it would be trading on a PE ratio of 56.9x, assuming you use a discount rate of 11.3%.
Given the current share price of $16.07, the analyst price target of $24.17 is 33.5% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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