Formfactor (FORM) AI Stock Analysis

• Market Cap: $4.59B
• Dividend Yield: N/A
• Average Volume (3M): 710.95K
• Price to Earnings (P/E): 112.7
• Beta (1Y): 2.26
• Revenue Growth: 2.29%
• EPS Growth: -69.81%
• Country: US
• Employees: 2,238
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.33
• Shares Outstanding: 77,517,100
• 10 Day Avg. Volume: 400,492
• 30 Day Avg. Volume: 710,952
• PEG Ratio: -3.38
• Price to Book (P/B): 3.75
• Price to Sales (P/S): 4.65
• P/FCF Ratio: 44.90
• Enterprise Value/Market Cap: 0.55
• Enterprise Value/Revenue: 3.30
• Enterprise Value/Gross Profit: 8.60
• Enterprise Value/Ebitda: 21.55
• 1Y Price Target: $57.00
• Price Target Upside: -3.70% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: $59.00 ▼(-0.32% Downside)

FormFactor's overall stock score reflects a mix of strengths and challenges. The most significant positive factor is the optimistic guidance and strategic initiatives highlighted in the earnings call, which suggest potential for future growth. However, the high P/E ratio raises concerns about overvaluation, and financial performance shows areas needing improvement, particularly in revenue growth and cash flow management. Technical indicators are favorable, supporting a positive short-term outlook.

Positive Factors

Revenue Growth

Formfactor's revenue growth and improved gross margins indicate strong demand for its products, supporting long-term market position and financial health.

Strategic Initiatives

Strategic investments and operational efficiencies are likely to drive sustainable growth and improve profitability, enhancing competitive positioning.

Market Position

Record growth in DRAM probe cards underscores Formfactor's strong market position in high-bandwidth memory, a key growth area in semiconductors.

Negative Factors

Profitability Pressure

Declining net profit margins suggest challenges in maintaining profitability, which could impact long-term financial performance if not addressed.

Free Cash Flow Decline

A significant decline in free cash flow limits Formfactor's ability to invest in growth opportunities and may strain financial flexibility.

Tariff Impact

Persistent tariff impacts on gross margins could hinder profitability and competitiveness, necessitating effective mitigation strategies.

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

FormFactor demonstrates a stable financial foundation with strong balance sheet metrics. However, the declining revenue growth and cash flow challenges in the TTM period highlight areas for improvement. The company should focus on enhancing revenue streams and cash flow management to sustain long-term growth.

Income Statement

Formfactor's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) data indicates a decline in revenue growth rate, which is concerning. However, the company maintains a stable EBIT and EBITDA margin, suggesting operational efficiency. The gross profit margin has slightly decreased, and the net profit margin has also declined, indicating pressure on profitability.

Balance Sheet

The balance sheet is strong, with a low debt-to-equity ratio indicating conservative leverage. The equity ratio is healthy, and the return on equity, while lower than previous years, remains positive. This suggests a stable financial position with manageable debt levels.

Cash Flow

Cash flow analysis reveals challenges, with a significant drop in free cash flow growth in the TTM period. The operating cash flow to net income ratio is healthy, but the free cash flow to net income ratio has decreased, indicating potential cash flow constraints. The company needs to focus on improving cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	759.31M	763.60M	663.10M	747.94M	769.67M	693.62M
Gross Profit	291.67M	307.92M	258.58M	296.01M	322.77M	287.92M
EBITDA	116.43M	112.73M	127.14M	96.49M	143.62M	134.72M
Net Income	39.68M	69.61M	82.39M	50.74M	83.92M	78.52M
Balance Sheet
Total Assets	1.20B	1.15B	1.11B	1.01B	1.02B	963.22M
Cash, Cash Equivalents and Short-Term Investments	266.03M	360.02M	328.32M	238.14M	276.06M	255.03M
Total Debt	33.20M	39.23M	48.15M	50.37M	63.27M	69.19M
Total Liabilities	193.38M	198.45M	197.99M	199.94M	204.74M	219.13M
Stockholders Equity	1.01B	947.77M	908.80M	808.28M	815.78M	744.08M
Cash Flow
Free Cash Flow	5.33M	79.10M	8.57M	66.53M	72.87M	113.39M
Operating Cash Flow	105.34M	117.53M	64.60M	131.79M	139.36M	169.26M
Investing Cash Flow	-163.82M	-33.48M	29.05M	-75.70M	-124.74M	-98.92M
Financing Cash Flow	-27.92M	-64.61M	-22.71M	-95.93M	-47.20M	-30.93M

Formfactor Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 59.19
• 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 Positive. The current price of 59.19 is above the 20-day moving average (MA) of 57.20, above the 50-day MA of 53.51, and above the 200-day MA of 37.52, indicating a bullish trend. The MACD of 1.31 indicates Positive momentum. The RSI at 61.39 is Neutral, neither overbought nor oversold. The STOCH value of 58.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FORM.

Formfactor Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACLS	78 Outperform	$2.67B	20.36	13.62%	―	-20.69%	-37.67%
DIOD	70 Outperform	$2.39B	37.22	3.47%	―	10.45%	4.37%
FORM	68 Neutral	$4.59B	112.70	4.16%	―	2.29%	-69.81%
POWI	62 Neutral	$2.06B	118.83	2.53%	2.27%	10.50%	-52.00%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
KLIC	61 Neutral	$2.53B	12,087.50	0.02%	1.77%	-7.38%	99.38%
SYNA	60 Neutral	$2.95B	-64.93	-3.16%	―	13.24%	-129.14%