FormFactor, a Zacks Rank #1 (Sturdy Purchase), is a number one supplier of semiconductor gear. The corporate presents electrical and optical check and measurement applied sciences spanning the total semiconductor product lifecycle. FormFactor is benefiting from sturdy development in high-bandwidth reminiscence (HBM) pushed by the speedy adoption of generative AI and high-performance computing.
The inventory is displaying relative outperformance and has been making a sequence of 52-week highs. The value motion is an indication of energy as we head additional into the brand new 12 months. Rising quantity has attracted investor consideration as shopping for strain accumulates on this top-ranked inventory.
FormFactor is a part of the Zacks Electronics – Semiconductors business group, which presently ranks within the prime 35% out of greater than 250 industries. As a result of this group is ranked within the prime half of all Zacks Ranked Industries, we count on it to outperform the market over the subsequent 3 to six months, simply because it has all through the previous 12 months:
Picture Supply: Zacks Funding Analysis
Shares on this group are additionally anticipated to expertise above common earnings development, signifying a robust basis that ought to result in increased costs. Historic analysis research counsel that roughly half of a inventory’s worth appreciation is because of its business grouping. Actually, the highest 50% of Zacks Ranked Industries outperforms the underside 50% by an element of greater than 2 to 1.
It’s no secret that investing in shares which might be a part of main business teams can provide us a leg up relative to the market. By specializing in main shares throughout the prime industries, we are able to dramatically enhance our stock-picking success.
Firm Description
Livermore, CA-based FormFactor designs, manufactures, and sells probe playing cards, analytical probes, probe stations, thermal techniques, and cryogenic techniques. The corporate presents these and associated providers within the U.S. and internationally.
Probe playing cards assist FormFactor to serve prospects’ design format and electrical check necessities by testing semiconductor system varieties corresponding to techniques on a chip (SoC), microprocessors, community and digital sign processing built-in circuits (ICs), dynamic random-access reminiscence (DRAM), and NAND flash reminiscence.
FormFactor presents greater than 50 completely different analytical probe fashions for engineering and manufacturing testing. As silicon photonics matures and strikes to high-volume manufacturing, FormFactor expects its management place in mixed electrical and optical testing to light up a brand new development path sooner or later.
Earlier this month, the corporate introduced a significant product launch — the Flatiron Dilution Fridge — a cryogenic system designed for quantum analysis and quantum {hardware} testing. That includes a horizontal benchtop design, the innovation permits for sooner experimental setup and fewer disassembly necessities. The system is appropriate for quantum processors, superconducting qubits and superior supplies analysis.
The corporate boasts a major buyer base together with the likes of Intel, Samsung, Micron Expertise, SK Hynix and Taiwan Semiconductor. Its clientele additionally contains universities and analysis establishments.
Earnings Developments and Future Estimates
FormFactor FORM has established a powerful reporting historical past, surpassing earnings estimates in three of the previous 4 quarters. The corporate most just lately delivered fourth-quarter earnings again in February of 46 cents per share, which marked a 31.4% shock over the $0.35/share consensus estimate.
The built-in circuits diagnostic firm delivered a trailing four-quarter common shock of 18.6%. Persistently beating earnings estimates is a recipe for fulfillment.
Analysts overlaying FORM are in settlement and have raised full-year EPS estimates by 17.65% previously 60 days. The Zacks Consensus Estimate now stands at $1.80/share, reflecting potential development of almost 40% relative to final 12 months.
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Let’s Get Technical
This market chief has seen its inventory advance almost 90% already this 12 months, all whereas the overall market struggles to achieve traction. Solely shares which might be in extraordinarily highly effective uptrends are in a position to expertise this sort of outperformance. That is the type of inventory we need to embrace in our portfolio – one that’s trending effectively and receiving optimistic earnings estimate revisions.
Picture Supply: StockCharts
Discover how each the 50-day (blue line) and 200-day (purple line) shifting averages are sloping up. The inventory has been making a sequence of upper highs in 2026. With each sturdy elementary and technical indicators, FORM inventory is poised to proceed its outperformance.
Empirical analysis reveals a robust correlation between near-term inventory actions and traits in earnings estimate revisions. As we all know, FormFactor has just lately witnessed optimistic revisions. So long as this development stays intact (and FORM continues to ship earnings beats), the inventory will probably proceed its bullish run.
Backside Line
Backed by a number one business group and historical past of earnings beats, it’s not tough to see why FORM inventory is a compelling funding. Sturdy fundamentals mixed with an interesting technical development actually justify including shares to the combination.
FormFactor continues to profit from elevated utilization of semiconductors with increasing infrastructure and enterprise spending. Rising deployment of 5G functions in mobility and automotive end-markets symbolize main prospects.
Latest optimistic earnings estimate revisions also needs to serve to create a ‘flooring’ by way of any sudden or surprising draw back strikes. For those who haven’t already completed so, make sure you put FORM in your shortlist.
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FormFactor, Inc. (FORM) : Free Inventory Evaluation Report
This text initially revealed on Zacks Funding Analysis (zacks.com).
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.
