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Formfactor
(NASDAQ:FORM)
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Rating:70Outperform
Price Target:
$121.00
▲(12.33% Upside)
Action:Reiterated
Date:10/29/26
Overall score is driven primarily by strong recent financial performance (improving margins, robust balance sheet, and solid free cash flow) and a notably positive earnings call with upbeat guidance and strong demand signals. These positives are tempered by weak technical momentum (trading below key moving averages with negative MACD) and a high P/E valuation that increases sensitivity to any slowdown or execution issues (including capacity constraints and nonrecurring margin benefits).
Positive Factors
Sustained Revenue Growth
Four consecutive record quarters and nearly 40% year-over-year growth indicate broadening demand across FormFactor’s semiconductor test portfolio. This stronger revenue base can support operating leverage, fund capacity expansion, and improve the company’s ability to compound earnings as advanced chip production grows.
Negative Factors
Semiconductor Cyclicality
FormFactor’s improved current run-rate remains exposed to semiconductor production and investment cycles. Prior revenue declines, margin variation, and inconsistent free-cash-flow conversion show that weaker industry conditions can materially reduce earnings power and cash generation even with a conservative balance sheet.
Read all positive and negative factors
Positive Factors
Negative Factors
Sustained Revenue Growth
Four consecutive record quarters and nearly 40% year-over-year growth indicate broadening demand across FormFactor’s semiconductor test portfolio. This stronger revenue base can support operating leverage, fund capacity expansion, and improve the company’s ability to compound earnings as advanced chip production grows.
Read all positive factors
Formfactor Key Performance Indicators (KPIs)
Any
Revenue by Geography
Maps revenue across countries and regions to identify customer concentration and supply-chain risk. For a supplier to semiconductor manufacturers like FormFactor, strong revenue in key fabrication hubs indicates dependence on a few large customers and makes top-line performance sensitive to their investment plans.
Maps revenue across countries and regions to identify customer concentration and supply-chain risk. For a supplier to semiconductor manufacturers like FormFactor, strong revenue in key fabrication hubs indicates dependence on a few large customers and makes top-line performance sensitive to their investment plans.
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The Fly
The FlyFormfactor (FORM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.62B
Dividend YieldN/A
Average Volume (3M)1.79M
Price to Earnings (P/E)49.7
Beta (1Y)2.19
Revenue Growth18.01%
EPS Growth161.14%
CountryUS
Employees2,153
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)2.22
Shares Outstanding78,120,730
10 Day Avg. Volume1,359,921
30 Day Avg. Volume1,788,595
Financial Highlights & Ratios
PEG Ratio-3.73
Price to Book (P/B)4.34
Price to Sales (P/S)5.72
P/FCF Ratio382.52
Enterprise Value/Market Cap1.15
Enterprise Value/Revenue10.14
Enterprise Value/Gross Profit20.50
Enterprise Value/Ebitda43.62
Forecast
1Y Price Target
$150.71Price Target Upside39.91% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
EPS Forecast (FY)3.04
Revenue Forecast (FY)$1.03B
Formfactor Business Overview & Revenue Model
Company Description
FormFactor, Inc., established in Livermore, California in 1993, specializes in the design, manufacturing, and global distribution of advanced test and measurement solutions for the semiconductor industry. The company primarily caters to semiconduc...
How the Company Makes Money
FormFactor makes money primarily by selling semiconductor test interconnect products—especially probe cards—which are consumable, application-specific hardware required to electrically contact and test semiconductor wafers during manufacturing. Re...
Formfactor Earnings Call Summary
Earnings Call Date:Oct 28, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Feb 10, 2027
Earnings Call Sentiment Positive
The call was strongly positive. FormFactor reported record revenue for the fourth consecutive quarter, close to 40% year-over-year revenue growth, improved baseline gross margins, strong cash flow, expanding Foundry and Logic demand, accelerating TRITON and photonics growth, and meaningful progress at the Farmers Branch facility. The principal challenges were that existing capacity is becoming constrained, Q3 HBM revenue declined due to mix shifts, and a portion of the exceptional gross-margin performance came from benefits that are not expected to recur. The highlights significantly outweigh the lowlights.Positive Updates
Record Q3 Revenue, Gross Margin and EPS
FormFactor grew revenue, gross margin and earnings per share in Q3, with each metric exceeding the high end of its outlook range. Revenue was $280.5 million, up $22.3 million or 9% sequentially and close to 40% higher year over year. Non-GAAP gross margin was 56.5% and non-GAAP earnings per fully diluted share were $1.04.
Negative Updates
Existing Manufacturing Footprint Nearing Capacity Limits
Management said the company is reaching the limits of its ability to extract more output from its existing manufacturing footprint. It is operating near those limits, and the Q4 incremental guidance increase is somewhat lower than the increase achieved in the prior quarter. Farmers Branch is intended to provide additional capacity.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Q3 Revenue, Gross Margin and EPS
FormFactor grew revenue, gross margin and earnings per share in Q3, with each metric exceeding the high end of its outlook range. Revenue was $280.5 million, up $22.3 million or 9% sequentially and close to 40% higher year over year. Non-GAAP gross margin was 56.5% and non-GAAP earnings per fully diluted share were $1.04.
Read all positive updates
Company Guidance
Fourth quarter guidance is revenue of approximately $285 million, plus or minus $10 million; at the midpoint, non-GAAP gross margin of 54%, plus or minus 150 basis points; non-GAAP operating expense of approximately $69 million, plus or minus $2 million; a non-GAAP effective tax rate within the range of 15% to 19%; and non-GAAP earnings per fully diluted share of $0.95, plus or minus $0.09. FormFactor expects TRITON revenue of upwards of $30 million in 2026, to exceed $1 billion of revenue in 2026, and 2026 Farmers Branch cash capital expenditures of between $100 million and $110 million, with $25 million to $30 million of Farmers Branch preproduction expense in 2026. Farmers Branch is expected to have the capability to produce about $400 million in annual probe card revenue exiting 2027, with that capability expected to ramp over the course of 2027, while 2027 gross margins are expected to continue at levels similar to the current baseline of around 53%; the company’s target model is $1.6 billion in revenues at 55% gross margins and $5 of EPS.Formfactor Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 980.10M | 784.99M | 763.60M | 663.10M | 747.94M | 769.67M |
| Gross Profit | 484.73M | 307.21M | 307.92M | 258.58M | 296.01M | 322.77M |
| EBITDA | 227.78M | 114.82M | 112.73M | 127.14M | 96.49M | 143.62M |
| Net Income | 173.63M | 54.36M | 69.61M | 82.39M | 50.74M | 83.92M |
Balance Sheet | ||||||
| Total Assets | 1.43B | 1.22B | 1.15B | 1.11B | 1.01B | 1.02B |
| Cash, Cash Equivalents and Short-Term Investments | 395.41M | 276.24M | 360.02M | 328.32M | 238.14M | 276.06M |
| Total Debt | 27.76M | 44.85M | 39.23M | 48.15M | 50.37M | 63.27M |
| Total Liabilities | 250.42M | 189.04M | 198.45M | 197.99M | 199.94M | 204.74M |
| Stockholders Equity | 1.18B | 1.04B | 947.77M | 908.80M | 808.28M | 815.78M |
Cash Flow | ||||||
| Free Cash Flow | 181.26M | 11.74M | 79.10M | 8.57M | 66.53M | 72.87M |
| Operating Cash Flow | 257.01M | 115.40M | 117.53M | 64.60M | 131.79M | 139.36M |
| Investing Cash Flow | -185.72M | -191.47M | -33.48M | 29.05M | -75.70M | -124.74M |
| Financing Cash Flow | -29.45M | -13.63M | -64.61M | -22.71M | -95.93M | -47.20M |
Formfactor Technical Analysis
Neutral
107.72
Price Trends
117.16
Negative
119.89
Negative
113.86
Negative
Market Momentum
-5.80
Positive
45.25
Neutral
55.60
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 107.72 is below the 20-day moving average (MA) of 122.09, below the 50-day MA of 117.16, and below the 200-day MA of 113.86, indicating a bearish trend. The MACD of -5.80 indicates Positive momentum. The RSI at 45.25 is Neutral, neither overbought nor oversold. The STOCH value of 55.60 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $48.97B | 35.72 | 42.04% | 0.16% | 74.93% | 218.54% | |
70 Outperform | $8.62B | 49.69 | 15.83% | ― | 18.01% | 161.14% | |
70 Outperform | $4.16B | 35.95 | 13.55% | 1.03% | 44.44% | 2283.94% | |
66 Neutral | $6.01B | 160.98 | 5.82% | 1.62% | 7.94% | -72.56% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $2.52B | -109.93 | -2.90% | 1.11% | 32.66% | 55.60% | |
52 Neutral | $2.11B | -280.61 | -4.66% | ― | -15.21% | -81.50% |
* Technology Sector Average
FORM
Formfactor
110.31
51.06
86.18%
AEHR
Aehr Test Systems
64.54
39.44
157.13%
CAMT
Camtek
128.78
4.75
3.83%
COHU
Cohu
53.14
29.08
120.86%
KLIC
Kulicke & Soffa
79.44
40.34
103.18%
TER
Teradyne
313.24
136.70
77.43%
Formfactor Corporate Events
Business Operations and StrategyPrivate Placements and Financing
FormFactor Announces Strategic Equity Investment and Collaboration
Positive
Oct 13, 2026
On October 12, 2026, FormFactor and Teradyne announced a broad technology collaboration to accelerate development, validation, and high-volume production deployment of next-generation semiconductor devices. The partnership combines FormFactor̵...
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.