Is Ultra Clean Holdings, Inc. overvalued or undervalued?

As of 28 July 2025, the valuation grade for Ultra Clean Holdings, Inc. has moved from fair to risky, indicating a shift in perception regarding its investment potential. The company appears to be overvalued, especially when considering its P/E ratio of 28, which is significantly higher than peers like Modine Manufacturing Co. at 36.40 and Mueller Water Products, Inc. at 26.00. Additionally, the EV to EBITDA ratio of 6.91 and a PEG ratio of 0.12 further suggest that the stock may not be justified at its current price level.
In comparison to its peers, Ultra Clean Holdings, Inc. has a notably high P/E ratio, while companies like Oceaneering International, Inc. offer a more attractive EV to EBITDA of 7.04. The company's recent stock performance has been mixed, as it has outperformed the S&P 500 over the past week and month, with returns of 10.74% and 22.71% respectively, but has underperformed on a year-to-date basis with a decline of 21.39% compared to the S&P 500's gain of 12.22%. This divergence reinforces the notion that the stock may be overvalued in the current market environment.