Krish Sankar, an analyst from TD Cowen, maintained the Hold rating on Formfactor. The associated price target was raised to $50.00.
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Krish Sankar has given his Hold rating due to a combination of factors influencing Formfactor’s current and future performance. The company’s recent guidance for the December quarter exceeded market expectations, primarily driven by stable demand for DRAM Probe Cards and significant improvements in gross margin. The ongoing restructuring of the manufacturing cost structure is anticipated to elevate the gross margin to over 45% by the end of calendar year 2026, which is a positive indicator for future earnings per share growth. However, while there are opportunities for expansion in the GPU and networking sectors, the extent of these opportunities remains uncertain.
Despite the promising outlook for DRAM and HBM demand, the foundry and logic sectors are experiencing subdued trends due to current product offerings and anticipated product launches not arriving until the first half of 2026. Additionally, while Formfactor is in the qualification phase for new GPU products, the timeline for revenue realization is still unclear. These mixed signals, along with the uncertainty in capturing a significant share of the potential market, contribute to the Hold rating, as the stock’s potential upside is balanced by these uncertainties.
According to TipRanks, Sankar is a top 100 analyst with an average return of 29.4% and a 66.15% success rate. Sankar covers the Technology sector, focusing on stocks such as Apple, Micron, and Applied Materials.