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Formfactor (FORM)
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Formfactor (FORM) AI Stock Analysis

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FORM

Formfactor

(NASDAQ:FORM)

Rating:59Neutral
Price Target:
$30.00
▲(2.39% Upside)
FormFactor's stock score is primarily impacted by its weak technical indicators and high valuation, suggesting potential downside risk. While financial stability and positive corporate events provide some support, the company needs to address profitability and cash flow challenges to improve its outlook.
Positive Factors
Diversification
HBM strength with FORM qualified at all three major manufacturers should help diversify as SK Hynix has been FORM's primary DRAM customer at low-mid 20% of total sales.
Growth Prospects
FormFactor announced that it is now ramping HBM probe cards at Micron, which should contribute to incremental growth.
Recovery
FormFactor reported a beat-and-raise quarter and delivered a rare V-shaped recovery after a disappointing print.
Negative Factors
Margin Performance
FormFactor reported less than ideal margin performance, affecting overall profitability.
Tariffs Impact
Guidance includes approximately $5 million of lost revenue from tariffs, mainly affecting customers in China, with an impact on gross margin as a result.
Unexpected Costs
June Q results were impacted by mix & unexpected costs associated with ramping HBM4 probe cards at a 2nd customer.

Formfactor (FORM) vs. SPDR S&P 500 ETF (SPY)

Formfactor Business Overview & Revenue Model

Company DescriptionFormFactor, Inc. is a leading provider of essential test and measurement technologies for the semiconductor industry. The company is headquartered in Livermore, California, and operates in sectors including semiconductor manufacturing and electronic design. FormFactor specializes in designing and manufacturing advanced wafer probe cards, analytical probes, and thermal sub-systems. These products are critical for wafer testing and help semiconductor manufacturers ensure the quality and performance of their products across various applications, from electronics to telecommunications.
How the Company Makes MoneyFormFactor generates revenue primarily through the sale of its semiconductor testing products, including probe cards and analytical probes. The company's key revenue streams include sales to semiconductor manufacturers and integrated device manufacturers who require precise testing solutions to improve yield and performance. FormFactor also capitalizes on its technological expertise and innovation to maintain long-term partnerships with leading semiconductor companies. Additionally, the company may receive income from service contracts related to the maintenance and support of its testing products. The growing demand for advanced semiconductor devices in various industries, such as consumer electronics and automotive, significantly contributes to FormFactor's earnings.

Formfactor Earnings Call Summary

Earnings Call Date:Jul 30, 2025
(Q2-2025)
|
% Change Since: -14.88%|
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While FormFactor achieved revenue exceeding expectations and made strategic investments for long-term growth, the company faced significant gross margin challenges, tariff impacts, and increased operating expenses. Despite expanding its customer base and receiving recognition for customer satisfaction, the financial metrics indicate a need for improvement in profitability.
Q2-2025 Updates
Positive Updates
Revenue Exceeds Expectations
FormFactor reported second quarter revenue of $195.8 million, which exceeded the high end of the outlook range by $0.8 million, representing a 14.3% increase from the first quarter.
Strategic Investments
FormFactor made two strategic investments by acquiring a manufacturing facility in Farmers Branch, Texas, and a minority equity investment in FICT, aimed at improving long-term competitiveness and profitability.
Growth in DRAM and HBM
DRAM revenues increased by 16.8% from the first quarter, with HBM revenues rising by $7.4 million to $37 million in Q2.
Customer Satisfaction Recognition
FormFactor was recognized as the #1 global supplier in test subsystems and focused chip-making equipment categories in the annual TechInsights' 2025 global customer satisfaction survey.
Negative Updates
Gross Margin Challenges
Non-GAAP gross margin fell to 38.5%, at the low end of the outlook range, due to an unfavorable product mix and ramp-up costs for an HBM DRAM customer.
Impact of Tariffs
Tariffs continue to negatively impact gross margins, reducing them by 1 to 1.5 percentage points, with potential increases in tariffs possibly further affecting margins.
Systems Segment Revenue Decline
Systems segment revenues decreased by $1.1 million from the first quarter, with a reduction in gross margin from 44.5% to 39.4%.
Increased Operating Expenses
Non-GAAP operating expenses rose to $52.5 million in Q2, driven by higher performance-based compensation, increased labor costs, and expenses related to the new manufacturing facility.
Company Guidance
During the second quarter of 2025, FormFactor reported revenues of $195.8 million, surpassing the high end of their outlook range by $0.8 million, largely due to unexpected growth in their probe card business. However, the non-GAAP gross margin fell to 38.5%, below expectations, primarily due to an unfavorable product mix shift and unforeseen ramp-up costs for a second HBM DRAM customer. Looking ahead to the third quarter, FormFactor anticipates revenues to remain stable, while projecting a slight increase in gross margin to 40% and operating profit. Despite these challenges, FormFactor remains optimistic about future growth, driven by advanced packaging and generative AI, and has made strategic investments to enhance long-term competitiveness and profitability. The company also reported a non-GAAP EPS of $0.27 for the quarter, $0.1 above the lower end of the outlook, with their probe cards segment seeing a significant revenue increase, highlighting their industry leadership and strong customer partnerships.

Formfactor Financial Statement Overview

Summary
FormFactor shows a solid financial position with consistent revenue growth and a strong balance sheet. However, there is pressure on margins and cash flows, which have decreased, indicating challenges in operational efficiency and cash generation.
Income Statement
75
Positive
Formfactor shows a stable Gross Profit Margin of approximately 40% over the periods, indicating efficiency in cost management. However, the Net Profit Margin has seen a decline from the previous year, primarily due to a decrease in EBIT, which has impacted profitability. The Revenue Growth Rate is modest but positive, reflecting steady growth in sales, though the latest TTM shows a slight dip. Margins such as EBIT and EBITDA have decreased in the latest TTM, signaling potential challenges in operational efficiency.
Balance Sheet
78
Positive
The company maintains a strong balance sheet with a low Debt-to-Equity Ratio, highlighting financial stability and low leverage. ROE has decreased slightly, aligning with the dip in net income, yet remains healthy. The Equity Ratio indicates a robust capital structure with a high proportion of equity funding the assets, reducing financial risk.
Cash Flow
70
Positive
Operating Cash Flow remains positive, although it has decreased compared to the previous year, which could constrain liquidity if the trend continues. Free Cash Flow has decreased in the TTM period, reflecting lower operational efficiency and capital expenditure management. The ratio of Operating Cash Flow to Net Income suggests reasonable cash generation from earnings, albeit with room for improvement.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue764.55M763.60M663.10M747.94M769.67M693.62M
Gross Profit295.75M307.92M258.58M303.43M322.77M287.92M
EBITDA93.12M112.73M127.14M104.64M150.79M140.68M
Net Income43.93M69.61M82.39M50.74M83.92M78.52M
Balance Sheet
Total Assets1.18B1.15B1.11B1.01B1.02B963.22M
Cash, Cash Equivalents and Short-Term Investments249.33M360.02M328.32M238.13M276.06M255.03M
Total Debt24.27M39.23M48.15M50.37M63.27M69.19M
Total Liabilities191.59M198.45M197.99M199.94M204.74M219.13M
Stockholders Equity990.02M947.77M908.80M808.28M815.78M744.08M
Cash Flow
Free Cash Flow3.63M79.10M8.57M66.53M72.87M113.39M
Operating Cash Flow105.08M117.53M64.60M131.79M139.36M169.26M
Investing Cash Flow-186.73M-33.48M29.05M-75.70M-124.74M-98.92M
Financing Cash Flow-52.36M-64.61M-22.71M-95.93M-47.20M-30.93M

Formfactor Technical Analysis

Technical Analysis Sentiment
Negative
Last Price29.30
Price Trends
50DMA
33.62
Negative
100DMA
31.43
Negative
200DMA
35.93
Negative
Market Momentum
MACD
-1.17
Positive
RSI
31.09
Neutral
STOCH
31.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FORM, the sentiment is Negative. The current price of 29.3 is below the 20-day moving average (MA) of 33.86, below the 50-day MA of 33.62, and below the 200-day MA of 35.93, indicating a bearish trend. The MACD of -1.17 indicates Positive momentum. The RSI at 31.09 is Neutral, neither overbought nor oversold. The STOCH value of 31.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FORM.

Formfactor Risk Analysis

Formfactor disclosed 34 risk factors in its most recent earnings report. Formfactor reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Formfactor Peers Comparison

Overall Rating
UnderperformOutperform
Sector (69)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$4.03B35.7324.28%1.39%32.63%46.16%
73
Outperform
$0.0018.748.68%3.30%
70
Outperform
$2.54B32.2010.16%2.60%10.78%58.82%
69
Neutral
¥234.30B14.837.64%2.58%9.20%5.94%
62
Neutral
$1.70B89.382.29%2.52%-6.17%
59
Neutral
$2.23B51.414.53%8.30%-63.69%
59
Neutral
$0.00-18.35%44.54%41.55%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FORM
Formfactor
29.14
-15.40
-34.58%
CAMT
Camtek
88.35
-1.76
-1.95%
KLIC
Kulicke & Soffa
32.36
-7.66
-19.14%
SIMO
Silicon Motion
76.51
17.58
29.83%
VECO
Veeco
19.94
-15.91
-44.38%
AMBA
Ambarella
63.40
20.27
47.00%

Formfactor Corporate Events

Private Placements and FinancingBusiness Operations and StrategyRegulatory Filings and Compliance
FormFactor Secures $150M Credit Facility with Wells Fargo
Positive
Jul 30, 2025

On July 29, 2025, FormFactor, Inc. entered into a Revolving Credit Agreement with Wells Fargo Bank, establishing a $150 million credit facility to support working capital and general corporate purposes. This agreement, which includes options for additional loans and various financial covenants, is expected to enhance FormFactor’s financial flexibility. Additionally, FormFactor’s Board of Directors adopted Amended and Restated By-laws on the same date, updating procedures for stockholder meetings and other governance aspects to align with regulatory requirements, potentially improving corporate governance and shareholder engagement.

The most recent analyst rating on (FORM) stock is a Buy with a $45.00 price target. To see the full list of analyst forecasts on Formfactor stock, see the FORM Stock Forecast page.

Executive/Board ChangesShareholder Meetings
FormFactor Stockholders Approve Key Proposals at Annual Meeting
Neutral
May 21, 2025

FormFactor, Inc. held its 2025 Annual Meeting of Stockholders on May 16, 2025, where several key proposals were approved. Notably, the stockholders approved an amendment to the 2012 Equity Incentive Plan, increasing the number of shares of common stock reserved for issuance by 2,200,000 shares. Additionally, all director nominees were elected, the executive compensation was approved on an advisory basis, and KPMG LLP was ratified as the Company’s independent registered public accounting firm for fiscal year 2025.

The most recent analyst rating on (FORM) stock is a Buy with a $51.00 price target. To see the full list of analyst forecasts on Formfactor stock, see the FORM Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 01, 2025