Is Entegris (ENTG) Pricing Still Justified After Recent Share Price Pullback?

• If you are wondering whether Entegris is still worth the price you see on your screen, this article walks through what that current valuation really reflects and what it might not be capturing.
• The stock last closed at US$108.28, with returns of 20.9% year to date and 10.5% over the past year, alongside shorter term moves of a 3.7% decline over 7 days and a 17.6% decline over 30 days that may have shifted how investors think about risk and opportunity.
• These recent swings sit against a longer backdrop that includes 34.2% returns over 3 years and 7.3% over 5 years, which gives a very different picture to the last month alone. That mix of short term weakness and longer term gains is a big part of why valuation is front of mind for many shareholders today.
• On Simply Wall St's 6 point valuation check, Entegris currently scores 1 out of 6. In this article we look at what different methods like multiples and discounted cash flows say about the stock, then finish with a more complete way to think about valuation that ties those pieces together.

Entegris scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Entegris Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model adds up the cash Entegris is expected to generate in the future and then discounts those amounts back to what they are worth in today’s dollars. It is essentially asking what a rational buyer might pay today for all those future cash flows.

For Entegris, the model used is a 2 Stage Free Cash Flow to Equity approach. The company’s latest twelve month free cash flow is about $351.5 million. Analysts have provided free cash flow estimates out to 2028, and Simply Wall St then extrapolates the projections further using its own assumptions, including a projected free cash flow of $850.3 million in 2030. All cash flows in this model are assessed in US$.

When those projected cash flows are discounted back, the DCF model arrives at an estimated intrinsic value of about $64.77 per share. Compared to the recent share price of $108.28, this implies the stock is 67.2% overvalued on this particular set of assumptions.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Entegris may be overvalued by 67.2%. Discover 48 high quality undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Entegris.

Approach 2: Entegris Price vs Earnings

For a profitable company like Entegris, the P/E ratio is a useful way to think about valuation because it links what you pay directly to the earnings the business is already generating. The level of a “normal” or “fair” P/E usually reflects what investors expect for future earnings growth and how much risk they see in those earnings.

Entegris currently trades on a P/E of 69.81x. That compares with a Semiconductor industry average P/E of about 41.72x and a peer group average of 40.67x, so the stock is priced at a higher multiple than both its sector and close comparables.

Simply Wall St’s Fair Ratio for Entegris is 41.91x. This is a proprietary estimate of what a reasonable P/E might be, given factors such as the company’s earnings growth profile, profit margins, industry, market cap and specific risks. Because it blends these company specific inputs, the Fair Ratio can be more informative than a simple comparison to peers or the broad industry, which do not fully adjust for differences in quality or risk.

Comparing the current P/E of 69.81x with the Fair Ratio of 41.91x points to Entegris trading above that fair range on this metric.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Entegris Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, which are simple stories you build around a company like Entegris. These connect your view of its future revenue, earnings and margins to a financial forecast, a fair value, and a clear comparison of that Fair Value with the current price on Simply Wall St’s Community page, where millions of investors share their views. For example, you might align with a more bullish Entegris Narrative that points to a Fair Value of about US$156 per share, or with a more cautious one closer to US$75. As fresh information such as earnings updates, guidance or news arrives, those Narratives refresh automatically, helping you decide whether the current price sits above or below your own Fair Value and whether that looks more like a buy, hold or sell moment for you.

For Entegris however we will make it really easy for you with previews of two leading Entegris Narratives:

Start by asking yourself which of these feels closer to your view on the business, then see how that lines up with the current share price.

🐂 Entegris Bull Case

Fair value in this narrative: about US$142.73 per share

Implied discount to this fair value at US$108.28: roughly 24.1% undervalued

Analyst modeled revenue growth used in this narrative: 7.01% per year

• Focuses on Entegris as a key beneficiary of rising semiconductor complexity, with advanced materials and manufacturing localization aimed at supporting margins and cash flow.
• Assumes revenue of US$3.9b and earnings of US$502.7m by 2028, with profit margins lifting from 9.2% to 12.9% and a future P/E of 57.4x used to justify a higher price target.
• Flags risks around high debt, Asia heavy exposure, trade policy changes and execution at new facilities, and encourages you to test whether the higher fair value and P/E multiple feel reasonable to you.

🐻 Entegris Bear Case

Fair value in this narrative: about US$75.00 per share

Implied premium to this fair value at US$108.28: roughly 44.4% overvalued

Analyst modeled revenue growth used in this narrative: 6.13% per year

• Highlights geopolitical tensions, tariffs, regulatory pressure and potential commoditization in some product lines as reasons why growth and margins could fall short of high expectations.
• Uses a fair value based on a lower future P/E of 32.9x, revenue of about US$4.0b and earnings of US$664.4m by 2028, and a discount rate of 11.47% to arrive at a US$75.00 price target.
• Suggests that, at this fair value, Entegris would be closer to what more cautious analysts are comfortable paying, and asks you to weigh whether current enthusiasm around AI and advanced chips is enough to support today’s higher market price.

If you want to go deeper into either story, you can use the Narratives as a starting point, edit the key assumptions like revenue growth, margins and P/E, and see how your own fair value estimate compares with the current price.

Do you think there's more to the story for Entegris? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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