Entegris, Inc. (ENTG): A Bull Case Theory

We came across a bullish thesis on Entegris, Inc. on R. Dennis’s Substack’s Substack by OppCost. In this article, we will summarize the bulls’ thesis on ENTG. Entegris, Inc.'s share was trading at $77.14 as of November 28th. ENTG’s trailing and forward P/E were 40.60 and 23.58 respectively according to Yahoo Finance.

Entegris, Inc. provides advanced materials and process solutions for the semiconductor and other high-technology industries in North America and internationally. ENTG has undergone one of the most significant transformations in the semiconductor materials ecosystem over the last five years. Once a diversified contamination-control supplier, the company has emerged as a vertically integrated materials science leader, reshaped by its $5.7B acquisition of CMC Materials in 2022.

This deal expanded Entegris into the high-growth CMP segment but also saddled it with >5x leverage, forcing a multi-year shift toward integration discipline, divestitures, and balance-sheet repair. The subsequent 2023–2024 downturn—driven by a severe wafer-start correction—stress-tested the business, yet Entegris maintained strong non-GAAP profitability thanks to its highly recurring, unit-driven consumables revenue, which now represents roughly 80% of sales.

By Q3 2025, the company reported $807M in quarterly revenue and record operating cash flow, underscoring the benefits of working-capital optimization, strong consumables demand at advanced nodes, and early returns from its 2024 reorganization into Materials Solutions and Advanced Purity Solutions. While GAAP margins remain suppressed by heavy amortization from the CMC acquisition, adjusted EBITDA margins have stabilized in the high-20s, comparable with larger peers like DuPont and Merck.

Looking forward, Entegris is positioned to benefit from an industry recovery tied to AI, HPC, and GAA architectures—all of which are increasingly materials-intensive. With leverage down to ~3.5x and CapEx set to normalize after major facility builds, free cash flow is poised for meaningful expansion in 2026 and beyond. Valuation work—including DCF and owner-earnings analysis—suggests modest undervaluation today, with a multi-year path to compound returns through deleveraging, margin recovery, and secular content growth.

Previously we covered a bullish thesis on ACM Research, Inc. (ACMR) by thexcapitalist in April 2025, noting China-driven demand, critical wafer-cleaning tools, and a valuation discount tied to geopolitical risk. The stock has appreciated by 81.57% as the thesis partially played out. The thesis still stands, and OppCost echoes similar optimism while contrasting Entegris’s broader scale and secular materials tailwinds.

Entegris, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held ENTG at the end of the second quarter which was 37 in the previous quarter. While we acknowledge the potential of ENTG as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.