Ichor (ICHR) is facing a mixed outlook as its structural margin and vertical-integration thesis is promising, but supply-chain scaling may face obstacles, Oppenheimer said in a note Wednesday after recent management meetings.
Despite a solid demand scenario, the availability of components is "uneven as suppliers struggle to scale," Oppenheimer said.
Checks at the Semicon trade show indicated that Ichor may see "constraints across cables, harnesses, connectors, valves and flow controllers," which may mean that its "execution hiccup" last quarter may become a persistent issue, the note said.
Meanwhile, Ichor's management is still targeting higher internal content and a structural gross margin improvement, and there are no apparent changes to the company's wider vertical-integration strategy, Oppenheimer said.
Ichor is not planning to raise prices, the investment firm said, and margin growth is expected to result from "increased proprietary content, lower-cost manufacturing, mix and operating execution."
Oppenheimer has a perform rating on Ichor and an $80 price target.
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