Ultra Clean Holdings (NASDAQ: UCTT) and Axcelis Technologies (NASDAQ:ACLS) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.
Analyst Recommendations
This is a summary of current recommendations for Ultra Clean Holdings and Axcelis Technologies, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ultra Clean Holdings | 0 | 3 | 3 | 0 | 2.50 |
| Axcelis Technologies | 0 | 1 | 3 | 0 | 2.75 |
Ultra Clean Holdings presently has a consensus price target of $28.40, indicating a potential upside of 26.90%. Axcelis Technologies has a consensus price target of $24.80, indicating a potential upside of 22.77%. Given Ultra Clean Holdings’ higher probable upside, equities research analysts clearly believe Ultra Clean Holdings is more favorable than Axcelis Technologies.
Valuation & Earnings
This table compares Ultra Clean Holdings and Axcelis Technologies’ revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Ultra Clean Holdings | $753.55 million | 0.99 | $74.66 million | $1.39 | 16.10 |
| Axcelis Technologies | $324.69 million | 1.94 | $37.37 million | $0.91 | 22.20 |
Ultra Clean Holdings has higher revenue and earnings than Axcelis Technologies. Ultra Clean Holdings is trading at a lower price-to-earnings ratio than Axcelis Technologies, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
83.1% of Ultra Clean Holdings shares are owned by institutional investors. Comparatively, 73.7% of Axcelis Technologies shares are owned by institutional investors. 2.6% of Ultra Clean Holdings shares are owned by company insiders. Comparatively, 5.7% of Axcelis Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares Ultra Clean Holdings and Axcelis Technologies’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ultra Clean Holdings | 6.25% | 24.16% | 13.62% |
| Axcelis Technologies | 9.10% | 12.52% | 8.41% |
Risk and Volatility
Ultra Clean Holdings has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500. Comparatively, Axcelis Technologies has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500.
Summary
Ultra Clean Holdings beats Axcelis Technologies on 8 of the 13 factors compared between the two stocks.
Ultra Clean Holdings Company Profile
Ultra Clean Holdings, Inc. is engaged in the design, engineering and manufacture of production tools, modules and subsystems the semiconductor capital equipment industry. The Company’s products include precision robotic solutions; gas delivery systems; a range of industrial and automation production equipment products; subsystems that includes wafer cleaning sub-systems, chemical delivery modules, top-plate assemblies, frame assemblies, and process modules. The Company offers its products for the semiconductor capital equipment and equipment industry segments. It also sells to the consumer, medical, energy, industrial, flat panel and research equipment industries. The Company is focused on providing specialized engineering and manufacturing solutions for these applications. It provides its original equipment manufacturing (OEM) customers an outsourced solution for the development, design, component sourcing, prototyping, engineering, manufacturing and testing of various systems.
Axcelis Technologies Company Profile
Axcelis Technologies, Inc. designs, manufactures and services ion implantation and other processing equipment used in the fabrication of semiconductor chips. The Company also provides aftermarket lifecycle products and services, including used tools, spare parts, equipment upgrades, maintenance services and customer training. The Company offers a complete line of high energy, high current and medium current implanters for all application requirements. The Company’s Purion XE high energy system combines its radio frequency (RF) Linac high energy, spot beam technology with the Purion platform. The Company also offers the Purion M medium current system. The Company’s Purion M systems also offer differentiation for specialty applications, such as hot silicon carbide. The Company’s Purion H high current system is extendable into ultra-low energy applications to satisfy future process requirements, including leakage current performance.
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