Analyst Brian Chin of Stifel Nicolaus maintained a Hold rating on Formfactor, boosting the price target to $42.00.
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Brian Chin has given his Hold rating due to a combination of factors influencing Formfactor’s current and future performance. The company delivered strong results in the third quarter, surpassing expectations, primarily driven by growth in High Bandwidth Memory (HBM) sales. However, the consumer market for PCs and smartphones remains weak, with major clients like Intel and TSMC contributing less than 10% to sales. This mixed performance suggests a cautious outlook.
Additionally, Formfactor is focusing on improving its gross margins through strategic initiatives and investments, such as the planned expansion of its manufacturing facility in Texas. While these efforts are promising, they are not expected to yield immediate results, and the stock’s valuation at 31 times the estimated earnings per share for 2026 suggests limited upside potential. Therefore, despite some positive developments, the Hold rating reflects a balanced view of the company’s current strengths and challenges.