Ultra Clean (UCTT) Oversold on GT Advanced (GTAT) Bankruptcy - Needham & Company

Needham & Company analyst Y. Edwin Mok is out defending Ultra Clean (NASDAQ: UCTT) with shares down 10% amid news GT Advanced Technologies (NASDAQ: GTAT), which is generally believed to be UCTT's customer, unexpectedly filed for bankruptcy. The analyst said the stock is oversold given that GTAT is a small customer.

Mok commented, "UCTT previously stated that sales to the customer in the crystal growth area (which we believe is GTAT) will decline in 2H14 after a strong ramp in 1H14. While lower sales from this customer will impact UCTT's non-semi sales, given that we believe the core SemiCap sector (>80% of total sales) will grow ~10% in the coming year, we expect UCTT stock performance will ultimately be driven by SemiCap sector growth in 2015."

Despite reducing our 2015 estimates by removing sales to GTAT, they reiterate their Buy but trim our PT from $14 to $13, based on an unchanged 2015 P/E of 13X.

The firm reduced2014 revenues from $520MM to $512MM due to lower 4Q14 sales in both SemiCap and eliminating GTAT revenues. They cut 2015 revenue by $20MM by removing sales to GTAT.

For an analyst ratings summary and ratings history on Ultra Clean click here. For more ratings news on Ultra Clean click here.

Shares of Ultra Clean closed at $9.12 yesterday.

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