In a recent update, B. Riley has adjusted the price target for FormFactor (FORM, Financial), raising it from $26 to $32. Despite maintaining a Neutral rating on the stock, the firm noted that FormFactor's first-quarter performance slightly surpassed market expectations. Additionally, the midpoint of the second-quarter forecast also came in above consensus. B. Riley suggests there could be a positive trend in future estimates for the company.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 9 analysts, the average target price for FormFactor Inc (FORM, Financial) is $40.78 with a high estimate of $52.00 and a low estimate of $26.00. The average target implies an upside of 44.91% from the current price of $28.14. More detailed estimate data can be found on the FormFactor Inc (FORM) Forecast page.
Based on the consensus recommendation from 10 brokerage firms, FormFactor Inc's (FORM, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for FormFactor Inc (FORM, Financial) in one year is $40.91, suggesting a upside of 45.38% from the current price of $28.14. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the FormFactor Inc (FORM) Summary page.
FORM Key Business Developments
Release Date: April 30, 2025
- Q1 Revenue: $171.4 million, a decrease of 9.6% from Q4 and an increase of 1.6% year-over-year.
- Non-GAAP Gross Margin: 39.2%, near the high end of the range.
- Non-GAAP EPS: $0.23, at the high end of the outlook range.
- Probe Card Segment Revenue: $136.5 million, a decrease of 9.2% from Q4.
- System Segment Revenue: $34.8 million, a decrease from Q4, comprising 20.3% of total company revenues.
- Foundry and Logic Revenue: $85 million, a 2.4% increase from Q4.
- DRAM Revenue: $48.9 million, a 22.8% decrease from Q4.
- Flash Revenue: $2.4 million, down from Q4.
- GAAP Gross Margin: 37.7%, compared to 38.8% in Q4.
- Non-GAAP Operating Income: $16.9 million, a decrease of 19.2% from Q4.
- GAAP Net Income: $6.4 million or $0.08 per share.
- Non-GAAP Net Income: $18 million or $0.23 per share.
- Free Cash Flow: $6.3 million, compared to $28.8 million in Q4.
- Capital Expenditures: $18.6 million in Q1.
- Total Cash and Investments: $302 million, a decrease of $64 million from Q4.
- Q2 Revenue Outlook: $190 million plus or minus $5 million.
- Q2 Non-GAAP Gross Margin Outlook: 40% plus or minus 150 basis points.
- Q2 Non-GAAP EPS Outlook: $0.30 plus or minus $0.04.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- FormFactor Inc (FORM, Financial) anticipates double-digit sequential revenue growth in the second quarter, driven by increased demand in all major markets.
- The company is experiencing strong demand for high bandwidth memory (HBM) DRAM probe cards, driven by investments in generative AI.
- FormFactor Inc (FORM) completed the acquisition of FICT Limited, enhancing access to multilayer organic substrates, which is crucial for advanced packaging.
- The company is seeing growth in its Systems segment, driven by innovations in quantum computing and high-performance computing.
- FormFactor Inc (FORM) has a strong leadership position in the silicon photonics lab space, with plans to expand into production for co-packaged optics.
Negative Points
- First quarter revenue and profitability were sequentially lower due to reduced demand for DRAM probe cards and systems.
- Tariffs are causing revenue and gross margin reductions, with an estimated mid-single-digit million-dollar impact on revenues.
- The company faces direct cost impacts from tariffs on goods imported from non-U.S. suppliers, affecting gross margins.
- Revenue from China continues to decline due to tariff increases and U.S. export controls, impacting overall revenue.
- FormFactor Inc (FORM) is experiencing lower DRAM and Flash revenues, contributing to a decrease in overall probe card segment revenues.
