Formfactor (FORM)
NASDAQ:FORM
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Formfactor
(NASDAQ:FORM)
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Rating:67Neutral
Price Target:
$127.00
▼(-7.44% Downside)
Action:Downgraded
Date:05/20/26
FORM scores well on core financial quality (especially a very low-debt balance sheet) and a positive earnings-call outlook with improving non-GAAP margins and growth guidance. The score is held back by weak near-term technicals and a stretched valuation (P/E ~93), alongside the need for better sustained profitability and cash conversion given slightly negative TTM free cash flow.
Positive Factors
Very strong, low-leverage balance sheet
FormFactor's exceptionally low leverage and sizable equity provide durable financial flexibility. Ample liquidity supports the planned Farmers Branch capex, cushions cyclical semiconductor demand swings, preserves optionality for R&D or buybacks, and lowers bankruptcy/credit stress risk over coming quarters.
Negative Factors
Weakening free cash flow and heavy near-term capex
Rising capex and working-capital needs have shifted FCF negative on a TTM basis and reduced cash conversion. Large Farmers Branch spending will keep cash demands elevated, constraining buybacks/dividends and increasing sensitivity to execution and demand over the next several quarters.
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Positive Factors
Negative Factors
Very strong, low-leverage balance sheet
FormFactor's exceptionally low leverage and sizable equity provide durable financial flexibility. Ample liquidity supports the planned Farmers Branch capex, cushions cyclical semiconductor demand swings, preserves optionality for R&D or buybacks, and lowers bankruptcy/credit stress risk over coming quarters.
Read all positive factors
Formfactor Key Performance Indicators (KPIs)
Formfactor (FORM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.15B
Dividend YieldN/A
Average Volume (3M)2.23M
Price to Earnings (P/E)93.5
Beta (1Y)2.16
Revenue Growth9.60%
EPS Growth25.63%
CountryUS
Employees2,238
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.88
Shares Outstanding77,954,770
10 Day Avg. Volume2,552,998
30 Day Avg. Volume2,228,888
Financial Highlights & Ratios
PEG Ratio-3.72
Price to Book (P/B)4.34
Price to Sales (P/S)5.72
P/FCF Ratio382.52
Enterprise Value/Market Cap1.06
Enterprise Value/Revenue11.51
Enterprise Value/Gross Profit27.34
Enterprise Value/Ebitda63.73
Forecast
1Y Price Target
$153.29Price Target Upside11.72% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)2.35
Revenue Forecast (FY)$963.56M
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 ...
How the Company Makes Money
FormFactor primarily makes money by selling semiconductor test hardware, with revenue recognized from product shipments (and, where applicable, associated support). Its largest revenue stream is probe cards—custom, application-specific electro-mec...
Formfactor Earnings Call Summary
Earnings Call Date:Apr 29, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call highlights strong operational execution: record sequential revenue, significant non-GAAP gross margin expansion (510 bps QoQ) and improving non-GAAP profitability, driven by probe card demand (notably HBM and networking), product wins (GPU, ASICs), accelerating CPO ramp and disciplined cost/operational improvements. Offsetting risks include GAAP impact from restructuring charges, systems segment seasonality and margin pressure, tariff uncertainty, and near-term capacity constraints until the Farmers Branch site ramps late in 2026. Liquidity is healthy and management provided constructive guidance for Q2 and a credible plan for durable margin improvement. Overall, the positive operational and financial momentum and clear roadmap outweigh the transitory and structural challenges noted.Positive Updates
Record Revenue and Upward Guidance
Q1 2026 revenue of $226.1 million, $1.1 million above the midpoint of guidance. Company reports sequential all-time record revenue and guides Q2 2026 revenue of $240 million +/- $5 million (≈ +6.2% vs Q1).
Negative Updates
GAAP Profitability Impacted by Restructuring
Q1 2026 GAAP net income was $20.4 million or $0.26 per diluted share, down from $23.2 million or $0.29 in Q4 2025. GAAP cost of revenues included $23.9 million of GAAP-to-non-GAAP reconciling items, of which $21.5 million related to Q1 restructuring; restructuring costs net of tax reduced GAAP earnings by $17.6 million.
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Q1-2026 Updates
Positive
Negative
Record Revenue and Upward Guidance
Q1 2026 revenue of $226.1 million, $1.1 million above the midpoint of guidance. Company reports sequential all-time record revenue and guides Q2 2026 revenue of $240 million +/- $5 million (≈ +6.2% vs Q1).
Read all positive updates
Company Guidance
For Q2 FY2026, FormFactor guided revenue of $240.0M ± $5.0M, non‑GAAP gross margin of 49.5% ±150 bps (including an assumed ~140 bps tariff headwind), non‑GAAP operating expenses of ~$65M ±$2M, a non‑GAAP effective tax rate of 15–19%, and non‑GAAP diluted EPS of $0.61 ± $0.04, and said the Q2 midpoint should deliver roughly another ~50 bps of gross‑margin expansion. Management noted Q1 run‑rate achievement of its target model (47% non‑GAAP gross margin at an $850M annualized revenue run rate), Q1 revenue of $226.1M (GAAP gross margin 38.4%, non‑GAAP 49.0%), Q1 non‑GAAP net income $44.5M ($0.56/sh) and GAAP net income $20.4M ($0.26/sh), free cash flow $30.7M, cash & investments $303M, Q1 GAAP‑to‑non‑GAAP reconciling items of $23.9M (including $21.5M restructuring), expected Farmers Branch cash CapEx of $140–170M and preproduction/G&A of $20–25M in 2026, a potential tariff refund of $9–11M if recoverable, $70.9M remaining buyback authorization, and emphasized cumulative gross‑margin improvement of more than 1,000 bps over the last three quarters.Formfactor Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
88
Very Positive
Cash Flow
56
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 839.78M | 784.99M | 763.60M | 663.10M | 747.94M | 769.67M |
| Gross Profit | 353.60M | 307.21M | 307.92M | 258.58M | 296.01M | 322.77M |
| EBITDA | 151.66M | 111.15M | 112.73M | 127.14M | 96.49M | 143.62M |
| Net Income | 68.34M | 54.36M | 69.61M | 82.39M | 50.74M | 83.92M |
Balance Sheet | ||||||
| Total Assets | 1.26B | 1.22B | 1.15B | 1.11B | 1.01B | 1.02B |
| Cash, Cash Equivalents and Short-Term Investments | 303.28M | 276.24M | 360.02M | 328.32M | 238.14M | 276.06M |
| Total Debt | 21.11M | 44.85M | 39.23M | 48.15M | 50.37M | 63.27M |
| Total Liabilities | 197.05M | 189.04M | 198.45M | 197.99M | 199.94M | 204.74M |
| Stockholders Equity | 1.06B | 1.04B | 947.77M | 908.80M | 808.28M | 815.78M |
Cash Flow | ||||||
| Free Cash Flow | 36.55M | 11.74M | 79.10M | 8.57M | 66.53M | 72.87M |
| Operating Cash Flow | 136.82M | 115.40M | 117.53M | 64.60M | 131.79M | 139.36M |
| Investing Cash Flow | -130.22M | -191.47M | -33.48M | 29.05M | -75.70M | -124.74M |
| Financing Cash Flow | -11.87M | -13.63M | -64.61M | -22.71M | -95.93M | -47.20M |
Formfactor Technical Analysis
Neutral
137.21
Price Trends
120.00
Negative
100.09
Positive
71.05
Positive
Market Momentum
0.09
Positive
39.18
Neutral
11.67
Positive
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 137.21 is below the 20-day moving average (MA) of 137.96, above the 50-day MA of 120.00, and above the 200-day MA of 71.05, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 39.18 is Neutral, neither overbought nor oversold. The STOCH value of 11.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FORM.
Formfactor Risk Analysis
Formfactor disclosed 37 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $3.77B | 215.30 | 2.44% | 2.27% | 3.11% | -54.05% | |
73 Outperform | $4.49B | 77.59 | 9.79% | ― | -11.75% | -41.15% | |
70 Outperform | $4.36B | 52.38 | 4.54% | ― | 15.97% | 234.66% | |
67 Neutral | $9.15B | 93.47 | 6.68% | ― | 9.60% | 25.63% | |
62 Neutral | $5.20B | 23.85 | 6.59% | 1.77% | 11.16% | 179.18% | |
62 Neutral | $4.60B | -83.31 | -3.47% | ― | 12.81% | -129.65% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
FORM
Formfactor
125.31
93.87
298.57%
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POWI
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SYNA
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129.82
67.61
108.68%
Formfactor Corporate Events
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and ComplianceShareholder Meetings
FormFactor Shareholders Approve Expanded Equity Plan and Governance
Positive
May 19, 2026
At its May 15, 2026 annual meeting, held online via live webcast, FormFactor stockholders approved an amendment to the company’s 2012 Equity Incentive Plan, increasing the shares of common stock reserved for issuance by 5,000,000, a move tha...
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.