Formfactor (FORM) AI Stock Analysis

• Market Cap: $2.27B
• Dividend Yield: N/A
• Average Volume (3M): 878.60K
• Price to Earnings (P/E): 52.3
• Beta (1Y): 2.00
• Revenue Growth: 8.30%
• EPS Growth: -63.69%
• Country: US
• Employees: 2,238
• Sector: Technology
• Sector Strength: 86
• Industry: Semiconductors
• EPS (TTM): 0.27
• Shares Outstanding: 77,114,210
• 10 Day Avg. Volume: 828,966
• 30 Day Avg. Volume: 878,602
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 3.26
• Enterprise Value/Gross Profit: 8.43
• Enterprise Value/Ebitda: 26.76
• 1Y Price Target: $31.25
• Price Target Upside: 6.22% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

• Rating: 62 Neutral
• Price Target: $30.00 ▲(1.97% Upside)

FormFactor's overall score is driven by financial stability and strategic investments, but is tempered by weak technical indicators and high valuation concerns. The company's efforts to enhance financial flexibility and governance are positive, but profitability and cash flow challenges remain significant risks.

Positive Factors

Advanced Packaging Demand

The growing demand of advanced packaging, and especially HBM, is driving ~20% higher probe cards intensity, and FORM is seen as a key beneficiary thanks to its strong position at SK Hynix and differentiated technology.

CPO Leadership

CPO is viewed as a major potential growth catalyst for FORM by extending its leadership position from the labs to the fabs.

HBM Market Expansion

FormFactor announced that it is now ramping HBM probe cards at Micron, which should contribute to incremental growth.

Negative Factors

Gross Margin Challenges

FORM's gross margin has been disappointing at sub-40% level, and there is an expectation of more self-help initiatives to reach the 47% target level.

Smartphone and PC Market Pressure

Muted smartphone and PC markets are pressuring both revenue and margins, with FORM's gross margin disappointing at sub-40% level.

Tariff 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.

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 through the sale of its semiconductor test solutions, including probe cards and related services, which are essential for the testing of integrated circuits during the manufacturing process. The company has a diverse customer base, including major semiconductor manufacturers and foundries, which contributes to its revenue stability. Key revenue streams include direct sales of products, service contracts for maintenance and support, and customized solutions tailored to specific customer needs. Formfactor also benefits from strategic partnerships with leading semiconductor companies, which can lead to collaborative projects and increased sales opportunities.

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

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	764.55M	763.60M	663.10M	747.94M	769.67M	693.62M
Gross Profit	295.75M	307.92M	258.58M	303.43M	322.77M	287.92M
EBITDA	93.12M	112.73M	127.14M	104.64M	150.79M	140.68M
Net Income	43.93M	69.61M	82.39M	50.74M	83.92M	78.52M
Balance Sheet
Total Assets	1.18B	1.15B	1.11B	1.01B	1.02B	963.22M
Cash, Cash Equivalents and Short-Term Investments	249.33M	360.02M	328.32M	238.13M	276.06M	255.03M
Total Debt	24.27M	39.23M	48.15M	50.37M	63.27M	69.19M
Total Liabilities	191.59M	198.45M	197.99M	199.94M	204.74M	219.13M
Stockholders Equity	990.02M	947.77M	908.80M	808.28M	815.78M	744.08M
Cash Flow
Free Cash Flow	3.63M	79.10M	8.57M	66.53M	72.87M	113.39M
Operating Cash Flow	105.08M	117.53M	64.60M	131.79M	139.36M	169.26M
Investing Cash Flow	-186.73M	-33.48M	29.05M	-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: Neutral
• Last Price: 29.42
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 29.42 is above the 20-day moving average (MA) of 29.13, below the 50-day MA of 32.57, and below the 200-day MA of 34.90, indicating a neutral trend. The MACD of -1.06 indicates Negative momentum. The RSI at 44.88 is Neutral, neither overbought nor oversold. The STOCH value of 64.18 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
CAMT	77 Outperform	$4.05B	30.49	24.28%	1.61%	27.88%	37.85%
SIMO	70 Outperform	$2.68B	32.69	10.16%	2.52%	-0.29%	1.47%
VECO	70 Neutral	$1.50B	24.63	7.83%	―	-0.19%	-28.72%
AMBA	63 Neutral	$3.00B	―	-18.35%	―	44.54%	41.55%
FORM	62 Neutral	$2.27B	52.28	4.53%	―	8.30%	-63.69%
KLIC	62 Neutral	$1.96B	473.54	0.66%	2.17%	-9.54%	―
Sector *	61 Neutral	$35.62B	8.22	-10.94%	1.88%	8.86%	-10.36%

Formfactor Corporate Events

FormFactor Appoints New CFO Amid Leadership Changes

On August 8, 2025, FormFactor, Inc. announced the resignation of Shai Shahar as Senior Vice President and Chief Financial Officer, effective immediately, with his continued role as Senior Vice President, Executive Advisor until the end of the year. Concurrently, the company appointed Aric McKinnis as the new Senior Vice President and Chief Financial Officer. McKinnis, who has been with FormFactor since 2019, brings extensive experience from his previous roles at MKS Instruments and Deloitte. His appointment is accompanied by a comprehensive compensation package, reflecting the company’s confidence in his leadership capabilities.

FormFactor Secures $150M Credit Facility with Wells Fargo

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.

FormFactor Stockholders Approve Key Proposals at Annual Meeting

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.