Formfactor (FORM) AI Stock Analysis

• Market Cap: $7.23B
• Dividend Yield: N/A
• Average Volume (3M): 1.58M
• Price to Earnings (P/E): 82.6
• Beta (1Y): 2.18
• Revenue Growth: 2.29%
• EPS Growth: -69.81%
• Country: US
• Employees: 2,238
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.46
• Shares Outstanding: 77,917,946
• 10 Day Avg. Volume: 1,326,334
• 30 Day Avg. Volume: 1,584,841
• PEG Ratio: -3.72
• Price to Book (P/B): 4.34
• Price to Sales (P/S): 5.72
• P/FCF Ratio: 382.52
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 8.53
• Enterprise Value/Gross Profit: 21.59
• Enterprise Value/Ebitda: 71.74
• 1Y Price Target: $82.13
• Price Target Upside: -11.31% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): 1.54
• Revenue Forecast (FY): $908.01M

• Rating: 73 Outperform
• Price Target: $111.00 ▲(19.87% Upside)
• Action: Reiterated Date: 02/06/26
• Date: Action: Reiterated 02/06/26

The score is driven primarily by solid financial stability (very low leverage) and strong technical momentum (price well above rising moving averages). Offsetting these positives are weak recent free-cash-flow conversion and a very expensive valuation (P/E ~121). The latest earnings call was a net positive due to record results and improving margin guidance, though tariff, concentration, and ramp-cost risks remain.

Positive Factors

Very low leverage / strong balance sheet

FormFactor's extremely low leverage and ~$275M cash provide durable financial flexibility to fund capex, absorb semiconductor cyclicality, and invest in R&D or M&A without stressing liquidity. This lowers financing risk and supports multi-quarter execution of strategic ramps.

Sustained gross margin improvement

Management's structural cost, yield and cycle-time actions have driven a multi-quarter 540bp gross margin uplift. If maintained, higher base gross margins improve earnings durability, fund capex internally, and mitigate tariff and volume variability over the next several quarters.

Leading market positions and strategic expansion

Market leadership across HBM, memory, foundry/logic plus GPU and custom ASIC traction, and the Keystone Photonics bolt-on expand addressable markets. Broader product set and multimarket wins support more durable revenue streams and higher content-per-wafer over time.

Negative Factors

Weak free cash flow conversion

FCF collapse to ~$12M and FCF representing ~5% of net income versus ~67% prior year signals weaker cash conversion from operations. Continued volatility in FCF reduces capacity to self-fund expansion, increases reliance on timing of receivables or external funding, and constrains buybacks.

Customer concentration risk (HBM)

Near-term HBM exposure concentrated with one large customer raises revenue volatility and negotiating leverage risk. Heavy reliance on a single program can produce abrupt order swings and limits multi-quarter visibility, complicating capacity planning and margin sustainability.

High capital intensity and ramp costs (Farmers Branch)

Large ~$140M–$170M capex and multi-year ramp into 2027 will absorb cash and raise execution risk; preproduction OpEx and startup costs compress near-term free cash flow and can delay returns, pressuring allocation between growth investment and shareholder capital returns.

Formfactor Business Overview & Revenue Model

Company Description

FormFactor, Inc. designs, manufactures, and sells probe cards, analytical probes, probe stations, metrology systems, thermal systems, and cryogenic systems to semiconductor companies and scientific institutions. It operates in two segments, Probe Cards and Systems. The company offers probe cards to test various semiconductor device types, including systems on a chip products, mobile application processors, microprocessors, microcontrollers, and graphic processors, as well as radio frequency, analog, mixed signal, image sensor, electro-optical, dynamic random access memory, NAND flash memory, and NOR flash memory devices; and analytical probes, which are used for a range of applications, including device characterization, electrical simulation model development, failure analysis, and prototype design debugging for universities, research institutions, semiconductor integrated device manufacturers, semiconductor foundries, and fabless semiconductor companies. It also provides probing systems for semiconductor design engineers to capture and analyze accurate data; surface metrology systems for the development, production, and quality control of semiconductor products; thermal subsystems, such as thermal chucks and other test systems used in probe stations and other applications; and precision cryogenic instruments, semiconductor tests, and measurement systems. In addition, the company offers on-site probe card maintenance and service training, seminars, and telephone support services. The company markets and sells its products through direct sales force, manufacturers' representatives, and distributors in the United States, Taiwan, South Korea, China, Japan, Europe, rest of Asia-Pacific, and internationally. FormFactor, Inc. was incorporated in 1993 and is headquartered in Livermore, California.

How the Company Makes Money

FormFactor generates revenue primarily through the sale of probe cards, which are critical for testing semiconductor wafers and chips. The company has a diversified revenue model that includes direct sales of its products, recurring revenue from service agreements, and engineering support services. Key revenue streams come from long-term contracts with major semiconductor manufacturers, allowing for stable income and growth. Additionally, FormFactor benefits from partnerships with leading technology companies, enabling them to stay at the forefront of innovations in semiconductor testing. The company's focus on R&D also allows it to introduce new products that meet evolving market demands, further contributing to its financial performance.

Formfactor Financial Statement Overview

Summary

Strong balance sheet with very low leverage (debt-to-equity ~0.03) provides flexibility, but fundamentals are mixed: revenue growth is modest (+3.4% TTM) while profitability has weakened (TTM net margin ~5.2% vs ~9.1% in 2024) and free cash flow fell sharply to ~$12M in TTM, signaling weaker cash conversion.

Income Statement

TTM (Trailing-Twelve-Months) revenue is up modestly (+3.4%), showing demand resilience, and gross margin remains solid (~38%). However, profitability has stepped down versus prior years: net margin fell to ~5.2% in TTM from ~9.1% in 2024 and ~12.4% in 2023, with EBITDA margin also lower than the 2020–2023 range. Overall, the business remains profitable but appears to be in a weaker margin phase.

Balance Sheet

The balance sheet is a clear strength, with very low leverage (TTM debt-to-equity ~0.03 and total debt only ~$21M against ~$1.0B equity). Equity and assets have grown over time, supporting financial flexibility. Return on equity has cooled in TTM (~4.1%) versus mid-to-high single digits in 2022–2024 and ~10% in 2020–2021, suggesting softer earnings power despite strong capitalization.

Cash Flow

Operating cash flow in TTM is healthy (~$115M) and broadly consistent with 2024, but free cash flow dropped sharply to ~$12M (from ~$79M in 2024), indicating heavier investment and/or working-capital pressure. Cash generation quality also looks weaker, with free cash flow representing only ~5% of net income in TTM versus ~67% in 2024. The company is still generating cash from operations, but free cash flow volatility is a key watch item.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	784.99M	763.60M	663.10M	747.94M	769.67M
Gross Profit	309.99M	307.92M	258.58M	296.01M	322.77M
EBITDA	104.95M	112.73M	127.14M	96.49M	143.62M
Net Income	54.36M	69.61M	82.39M	50.74M	83.92M
Balance Sheet
Total Assets	1.22B	1.15B	1.11B	1.01B	1.02B
Cash, Cash Equivalents and Short-Term Investments	276.24M	360.02M	328.32M	238.14M	276.06M
Total Debt	44.85M	39.23M	48.15M	50.37M	63.27M
Total Liabilities	189.04M	198.45M	197.99M	199.94M	204.74M
Stockholders Equity	1.04B	947.77M	908.80M	808.28M	815.78M
Cash Flow
Free Cash Flow	11.74M	79.10M	8.57M	66.53M	72.87M
Operating Cash Flow	115.40M	117.53M	64.60M	131.79M	139.36M
Investing Cash Flow	-191.47M	-33.48M	29.05M	-75.70M	-124.74M
Financing Cash Flow	-13.63M	-64.61M	-22.71M	-95.93M	-47.20M

Formfactor Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 92.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FORM, the sentiment is Neutral. The current price of 92.6 is below the 20-day moving average (MA) of 94.08, above the 50-day MA of 78.43, and above the 200-day MA of 48.65, indicating a neutral trend. The MACD of 5.38 indicates Positive momentum. The RSI at 53.83 is Neutral, neither overbought nor oversold. The STOCH value of 25.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FORM.

Formfactor Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACLS	74 Outperform	$2.66B	21.10	11.74%	―	-20.69%	-37.67%
FORM	73 Outperform	$7.23B	82.61	5.48%	―	2.29%	-69.81%
DIOD	73 Outperform	$3.06B	34.57	3.60%	―	10.45%	4.37%
POWI	64 Neutral	$2.66B	90.19	3.11%	2.27%	10.50%	-52.00%
KLIC	62 Neutral	$3.55B	37.65	-7.19%	1.77%	-7.38%	99.38%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SYNA	61 Neutral	$2.98B	-48.27	-4.49%	―	13.24%	-129.14%

Formfactor Corporate Events

FormFactor Announces Planned Board Retirement and Refresh

On February 13, 2026, FormFactor director Kevin Brewer informed the board that he will retire from the board at the end of his current term and will not stand for re-election at the company’s 2026 annual meeting of stockholders, anticipated on May 15, 2026. The company stated that Brewer’s decision was not due to any disagreement over FormFactor’s operations, policies, or practices, underscoring that the transition is planned and orderly rather than a response to governance or strategic concerns.

In a February 18, 2026 announcement, FormFactor highlighted Brewer’s contributions since joining the board in 2024, citing his experience as a former public company CFO and operations executive at semiconductor equipment maker Axcelis Technologies. Brewer’s departure will remove a board member with deep financial and manufacturing expertise from the audit and governance committees, signaling an upcoming refresh of board roles that investors may watch for continuity in oversight and strategic guidance.

The most recent analyst rating on (FORM) stock is a Buy with a $94.00 price target. To see the full list of analyst forecasts on Formfactor stock, see the FORM Stock Forecast page.

FormFactor Announces Major Restructuring and Facility Consolidation

On January 5, 2026, FormFactor, Inc. adopted restructuring plans aimed at better aligning its cost structure with its target financial model and improving gross margins, while consolidating manufacturing facilities in Carlsbad and Baldwin Park, California. The plans, which are expected to be largely completed by the end of December 2026, involve severance or retention actions affecting approximately 200 to 300 employees and are expected to generate total restructuring charges of about $30 million to $40 million, with $10 million to $15 million in future cash expenditures and $20 million to $25 million in non-cash charges, most of which are anticipated to be recognized in the current fiscal year.

The most recent analyst rating on (FORM) stock is a Buy with a $78.00 price target. To see the full list of analyst forecasts on Formfactor stock, see the FORM Stock Forecast page.