Entegris (ENTG), a provider of advanced materials and process solutions for semiconductor and high-technology industries, is using new useful life estimates to inflate its operating income and margins.

In January 2026, Entegris increased the useful life estimates for nearly all its property, plant and equipment to more:

“...closely reflect the expected economic lives of these assets…”

The change slashed depreciation expense and will inflate 2026 Operating Income by $72.9 million, or 11.9% of the consensus estimate.

Notably, the increase in manufacturing equipment from 5-10 years to 5-14 years appears aggressive compared to Entegris’ peers.

Three companies Entegris includes in its peer group, selected randomly, depreciate similar equipment as follows:

—Zebra Technologies (ZBRA) 3-10 years
—KLA Corp. (KLA) 2-10 years
—AMETEK, Inc. (AME) 3-10

With an Enterprise Value (EV) of approximately $23 billion, Entegris is priced as if it will grow annual sales to more than $17.4 billion, up from an estimated $3.4 billion in 2026. To justify its current share price of $137.79 our Reverse DCF— which quantifies investor expectations embedded in the current share price— indicates Entegris must:

—Grow sales 18.5% annually for the next decade, faster than the consensus 2026 estimate of 7.1% and the three-year average of (0.7%)
—Increase NOPAT margin to 17.6%, versus our 2025 estimate of 11.4% and three-year average estimate of 8.6%
—Increase Invested Capital (IC) Turns to 1.5, up from our 2026 and three-year estimates of 0.42

Notably, the current share price also implies Entegris increases Return on Invested Capital (ROIC) to 26.4% from our 2026 estimate of 4.68% and three-year average estimate of 3.61%: