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Is ENTG Stock's Valuation Too Rich After a 72% YTD Run?
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Key Takeaways
Entegris stock is up 72.5% YTD, lifting expectations ahead of the late-July update.
ENTG trades at 38.25x forward earnings vs 35.46x sub-industry, keeping the valuation debate loud.
ENTG Q1'26 EPS surged 28.4% YoY to 86 cents as sales rose 5% to $811.9M.
Entegris, Inc. (ENTG - Free Report) has enjoyed a powerful move higher, and that momentum is now forcing investors to ask a tougher question: what has to go right from here for the stock to keep working?
The shares have climbed 72.5% year-to-date and 77.7% over the past year. After a run like that, execution matters more, and even modest disappointments can feel larger.
ENTG’s Rally Sets a Higher Bar for Results
ENTG’s price action has outpaced key benchmarks. Year-to-date, the Zacks Electronics – Semiconductors industry is up 43.1% and the Zacks Computer and Technology sector is up 16.5%, while the S&P 500 has gained 9%.
Entegris YTD Price Return Performance
Image Source: Zacks Investment Research
Over the past 12 months, the industry and sector have risen 99.2% and 48.8%, respectively, versus ENTG’s 79.3% gain. The S&P 500 has advanced 30.4% over the same period.
That backdrop raises the bar for results and guidance follow-through, especially with the next update expected in late July.
Entegris Neutral View Tied to In-Line Expectations
The current long-term view reflects expectations for ENTG to perform in line with the market.
That stance is paired with a $157 price target over the next 6 to 12 months, which frames the upside as more measured after the stock’s sharp advance.
In other words, the setup is less about discovering a recovery and more about proving it quarter after quarter.
ENTG Multiples Versus Industry and Market Benchmarks
Valuation is where the debate gets louder. ENTG trades at 38.25x forward 12-month earnings. That compares with 35.46x for the Zacks sub-industry, 25.73x for the Zacks sector, and 22.16x for the S&P 500.
Over the past five years, P/E multiples have ranged from 15.0x to 46.01x, with a five-year median of 29.1x.
The $157 target is anchored to a 40.16x forward 12-month earnings multiple, implying the valuation framework remains premium but not unbounded.
Entegris Earnings Power Improving With Operating Leverage
The “why pay up” case starts with earnings power that is improving. In the first quarter of 2026, ENTG delivered non-GAAP earnings of 86 cents per share, up 28.4% year over year, and posted an adjusted EBITDA margin of 27.8%.
Net sales rose 5% from the year-ago quarter to $811.9 million. Growth was spread across both segments, with Advanced Purity Solutions leading the top-line mix.
Advanced Purity Solutions revenue increased 6.8% year over year to $463.6 million, supported by strength in liquid filtration and FOUPs. Materials Solutions revenue rose 2.8% to $351.1 million, with contributions from advanced deposition materials, selective etch and chemical mechanical planarization consumables.
ENTG Margin Drivers Include Mix and Self-Help Actions
Margins also showed progress. On a GAAP basis, gross margin expanded to 46.9% from 46.1% a year ago, alongside better operating leverage.
Management attributed gross margin improvement to productivity actions and product mix. It also noted that a useful-life accounting change implemented in early 2026 reduced depreciation expense, which benefited gross margin.
At the same time, the quarter included roughly 50 basis points of one-time items that are not expected to recur at similar levels, a reminder that the path can be uneven as footprint actions continue.
Entegris Cash Flow Helps, but Leverage Still Matters
Cash generation is a supportive part of the story. First-quarter 2026 operating cash flow was $183.0 million, capital expenditures were $41.5 million, and free cash flow totaled $143.5 million.
ENTG used that flexibility to make a $50 million term-loan repayment and ended the quarter with $442.7 million in cash and cash equivalents.
Leverage is still a gating factor. Management cited net leverage at 3.6x and guided toward approximately 3x by the end of 2026, while net interest expense is expected to be slightly below $190 million for 2026.
Estimate revisions have been constructive, with the current fiscal year earnings estimate up 5.6% over the last four weeks.
For context, Cirrus Logic, Inc. (CRUS - Free Report) and FormFactor, Inc. (FORM - Free Report) also sit within the same broader semiconductor industry list, highlighting that investors have multiple ways to express a view on the space as cycle and spending signals evolve.
Entegris Decision Framework Into the Next Print
The next print should be judged against a clear checklist. For the second quarter of 2026, management guided net sales to $815 million-$845 million and non-GAAP earnings per share to 76 - 84 cents.
Investors will also want to see whether CapEx-driven revenues increase as the year progresses, as management expects, and whether mid to high-single-digit MSI growth holds through 2026.
Finally, margin durability will matter as investments resume. Second-quarter guidance calls for gross margin in the range of 46.25% - 47.25% and adjusted EBITDA margin between 27% and 28%, putting operational execution at the center of the valuation debate.
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Is ENTG Stock's Valuation Too Rich After a 72% YTD Run?
Key Takeaways
Entegris, Inc. (ENTG - Free Report) has enjoyed a powerful move higher, and that momentum is now forcing investors to ask a tougher question: what has to go right from here for the stock to keep working?
The shares have climbed 72.5% year-to-date and 77.7% over the past year. After a run like that, execution matters more, and even modest disappointments can feel larger.
ENTG’s Rally Sets a Higher Bar for Results
ENTG’s price action has outpaced key benchmarks. Year-to-date, the Zacks Electronics – Semiconductors industry is up 43.1% and the Zacks Computer and Technology sector is up 16.5%, while the S&P 500 has gained 9%.
Entegris YTD Price Return Performance
Image Source: Zacks Investment Research
Over the past 12 months, the industry and sector have risen 99.2% and 48.8%, respectively, versus ENTG’s 79.3% gain. The S&P 500 has advanced 30.4% over the same period.
That backdrop raises the bar for results and guidance follow-through, especially with the next update expected in late July.
Entegris Neutral View Tied to In-Line Expectations
The current long-term view reflects expectations for ENTG to perform in line with the market.
That stance is paired with a $157 price target over the next 6 to 12 months, which frames the upside as more measured after the stock’s sharp advance.
In other words, the setup is less about discovering a recovery and more about proving it quarter after quarter.
ENTG Multiples Versus Industry and Market Benchmarks
Valuation is where the debate gets louder. ENTG trades at 38.25x forward 12-month earnings. That compares with 35.46x for the Zacks sub-industry, 25.73x for the Zacks sector, and 22.16x for the S&P 500.
Over the past five years, P/E multiples have ranged from 15.0x to 46.01x, with a five-year median of 29.1x.
The $157 target is anchored to a 40.16x forward 12-month earnings multiple, implying the valuation framework remains premium but not unbounded.
Entegris Earnings Power Improving With Operating Leverage
The “why pay up” case starts with earnings power that is improving. In the first quarter of 2026, ENTG delivered non-GAAP earnings of 86 cents per share, up 28.4% year over year, and posted an adjusted EBITDA margin of 27.8%.
Net sales rose 5% from the year-ago quarter to $811.9 million. Growth was spread across both segments, with Advanced Purity Solutions leading the top-line mix.
Advanced Purity Solutions revenue increased 6.8% year over year to $463.6 million, supported by strength in liquid filtration and FOUPs. Materials Solutions revenue rose 2.8% to $351.1 million, with contributions from advanced deposition materials, selective etch and chemical mechanical planarization consumables.
ENTG Margin Drivers Include Mix and Self-Help Actions
Margins also showed progress. On a GAAP basis, gross margin expanded to 46.9% from 46.1% a year ago, alongside better operating leverage.
Management attributed gross margin improvement to productivity actions and product mix. It also noted that a useful-life accounting change implemented in early 2026 reduced depreciation expense, which benefited gross margin.
At the same time, the quarter included roughly 50 basis points of one-time items that are not expected to recur at similar levels, a reminder that the path can be uneven as footprint actions continue.
Entegris Cash Flow Helps, but Leverage Still Matters
Cash generation is a supportive part of the story. First-quarter 2026 operating cash flow was $183.0 million, capital expenditures were $41.5 million, and free cash flow totaled $143.5 million.
ENTG used that flexibility to make a $50 million term-loan repayment and ended the quarter with $442.7 million in cash and cash equivalents.
Leverage is still a gating factor. Management cited net leverage at 3.6x and guided toward approximately 3x by the end of 2026, while net interest expense is expected to be slightly below $190 million for 2026.
ENTG Trading Lens From Style Scores and Revisions
From a near-term trading lens, the Zacks Rank is #2 (Buy). Style Scores point to Momentum A and Growth B, offset by Value D and a VGM Score of C. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Estimate revisions have been constructive, with the current fiscal year earnings estimate up 5.6% over the last four weeks.
For context, Cirrus Logic, Inc. (CRUS - Free Report) and FormFactor, Inc. (FORM - Free Report) also sit within the same broader semiconductor industry list, highlighting that investors have multiple ways to express a view on the space as cycle and spending signals evolve.
Entegris Decision Framework Into the Next Print
The next print should be judged against a clear checklist. For the second quarter of 2026, management guided net sales to $815 million-$845 million and non-GAAP earnings per share to 76 - 84 cents.
Investors will also want to see whether CapEx-driven revenues increase as the year progresses, as management expects, and whether mid to high-single-digit MSI growth holds through 2026.
Finally, margin durability will matter as investments resume. Second-quarter guidance calls for gross margin in the range of 46.25% - 47.25% and adjusted EBITDA margin between 27% and 28%, putting operational execution at the center of the valuation debate.