One-glance verdict
Overvalued
$28.27 our estimate vs market $98.80
Wall Street consensus: $144.67 (411.7% higher than our fair-value estimate)
249% above our estimate, beyond the bull case
Fundamentals snapshot
FormFactor, Inc.
FORM · NMS · Technology · Semiconductor Equipment & Materials
Current price
$98.80
52-week range
$26.08 - $160.27
Market cap
$7.70B
Balance sheet
Healthy
115.35x Strong cushion
Net cash $271.39M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 7.0% last year.
- Reward Returns 6.8% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 122.5% above its 5-year average P/E.
What this company does
FormFactor, Inc.
FormFactor provides essential testing equipment for the computer chip industry, with most of its money coming from selling products called "probe cards." These tools act like tiny, precise inspection kits that check if new computer chips work correctly before they are put into devices like our phones and cars. This is important because as chips become more powerful and complex, chipmakers rely more on FormFactor's equipment to ensure quality and prevent defects.
How the company got here
Founded in 1993 by a former IBM researcher, FormFactor started with a breakthrough idea for testing semiconductors, the tiny electronic brains in all our devices. They developed a unique technology using microscopic springs, called MicroSprings, to check for defects on silicon wafers before they are cut into individual chips. This innovation allowed chipmakers to test many more chips at once, saving them significant time and money. The company went public in 2003 and grew by acquiring other companies to expand its technology and market reach, becoming a leading supplier in the semiconductor test industry.
What it actually does
Imagine baking a giant sheet of cookies and needing to check if every single one is perfect before cutting them apart. FormFactor makes the super-precise tools that do this for computer chips. Before a silicon wafer (the 'cookie sheet') is sliced into hundreds of individual chips, FormFactor's equipment 'touches' each one to test if it works correctly. This process, called wafer probing, is critical for chipmakers to ensure quality and avoid wasting money on faulty products. The company provides the essential test and measurement technologies for the entire lifecycle of a chip, from early design to mass production.
Probe Cards
This is FormFactor's main business, making up the vast majority of its revenue. A probe card is a highly advanced interface, kind of like a complex adapter, that connects a semiconductor wafer to the testing equipment. Chipmakers, such as those making processors for phones or memory for computers, pay FormFactor for these custom-designed cards to test their specific chips. Because chip designs are constantly changing, these probe cards are consumable products that need to be replaced with new designs, creating a recurring revenue stream (a steady, predictable source of income) for the company.
Systems
This smaller but important part of the company sells the machinery and equipment used during the research and development phase of chipmaking. This includes probe stations, which are the tools that hold the wafer and the probe card, and specialized systems that control temperature with extreme precision during testing. Customers for these systems are often semiconductor manufacturers and research institutions who need to perform detailed analysis and characterization (the process of defining the features and behaviors) of their new chip designs before they go into full production.
What management is betting on now
FormFactor is focusing its strategy on the most powerful trends in the semiconductor industry, especially those related to artificial intelligence and high-performance computing. This includes developing testing technology for advanced packaging (new ways of combining different chips together) and high-bandwidth memory (HBM), which are critical for AI applications. The company is also investing in new manufacturing facilities to increase its production capacity and is developing solutions for emerging technologies like silicon photonics (using light to move data on chips) and quantum computing.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$13.48M
FY2024 Q3
$17.79M
FY2024 Q4
$28.25M
FY2025 Q1
$4.96M
FY2025 Q2
$-47.36M
FY2025 Q3
$19.49M
FY2025 Q4
$34.66M
FY2026 Q1
$29.77M
Revenue
$226.14M
Net income
$20.38M
Diluted EPS
0.26
Operating cash flow
$44.96M
Free cash flow
$29.77M
Fetching…
Sources
Revenue
$215.16M
Net income
$23.22M
Diluted EPS
0.29
Operating cash flow
$45.98M
Free cash flow
$34.66M
Fetching…
Sources
Revenue
$202.68M
Net income
$15.66M
Diluted EPS
0.20
Operating cash flow
$26.99M
Free cash flow
$19.49M
Fetching…
Sources
Revenue
$195.80M
Net income
$9.09M
Diluted EPS
0.12
Operating cash flow
$18.89M
Free cash flow
$-47.36M
Fetching…
Sources
Revenue
$171.36M
Net income
$6.40M
Diluted EPS
0.08
Operating cash flow
$23.54M
Free cash flow
$4.96M
Fetching…
Sources
Revenue
$189.48M
Net income
$9.71M
Diluted EPS
0.12
Operating cash flow
$35.91M
Free cash flow
$28.25M
Fetching…
Sources
Revenue
$207.92M
Net income
$18.74M
Diluted EPS
0.24
Operating cash flow
$26.73M
Free cash flow
$17.79M
Fetching…
Sources
Revenue
$197.47M
Net income
$19.39M
Diluted EPS
0.25
Operating cash flow
$21.88M
Free cash flow
$13.48M
Fetching…
Sources
Is it cheap or expensive?
Fair value $28.27 vs current price $98.80
Wall Street consensus is the average analyst price target: $144.67 (411.7% higher than our fair-value estimate).
Our most-likely fair value is $28.27 a share — about 71.4% below today's price of $98.80, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $271.4M - more cash than debt. Interest coverage 115.3x.
Net debt
$-271.39M
Interest coverage
115.35x
FormFactor, Inc.'s profit covers its interest bill about 115.3 times over. which is stronger than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
FORM
BASELINE
FormFactor, Inc.
Total debt $31.89M Interest coverage 115.35x This is the baseline the peer rows are being compared against.
Total debt $0.00 Interest coverage 4.33x -96% vs FORM Carries about 26.7x less debt cushion than FORM.
Total debt $82.40M Interest coverage 100.59x -13% vs FORM Has roughly the same debt cushion as FORM.
Total debt $330.08M Interest coverage -29.03x -100% vs FORM This peer has almost no interest-payment cushion compared with FORM.
Total debt $39.79M Interest coverage -293.99x -100% vs FORM This peer has almost no interest-payment cushion compared with FORM.
Total debt $123.33M Interest coverage 181.23x +57% vs FORM Carries about 1.6x more debt cushion than FORM.
What you should know
The case for and against FORM
3 Rewards
1 Risk
Rewards
-
Revenue grew 7.0% last year.
-
Returns 6.8% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 122.5% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
113.56x
Forward P/E
35.40x
P/B
7.27x
P/S
9.17x
EV/EBITDA
54.08x
PEG ratio
1.39x
Profitability
How much profit each dollar creates
Gross margin
42.2%
Operating margin
17.7%
Net margin
8.1%
ROE
6.8%
ROA
5.2%
Health
Liquidity and balance-sheet strength
Debt / equity
0.03x
Current ratio
4.55x
Quick ratio
3.34x
Total debt
$31.89M
Total cash
$303.28M
Growth
How the business has been compounding
Revenue TTM
$839.78M
Revenue 5Y CAGR
0.5%
EPS TTM
0.87
EPS 5Y CAGR
2.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$136.82M
Free CF TTM
$11.74M
FCF margin
1.4%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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