On Tuesday, Stifel analysts, led by Brian Chin, reaffirmed their Hold rating on shares of FormFactor (NASDAQ:FORM), with a steady price target of $48.00. According to InvestingPro data, analyst targets for FormFactor range from $44 to $65, with the company maintaining a strong financial health score of "GOOD" and holding more cash than debt on its balance sheet.
The team provided insights following a recent Non-Deal Roadshow, highlighting the company's stable position in the High Bandwidth (NASDAQ:BAND) Memory (HBM) DRAM market. Despite a lack of significant growth in the foundry/logic market, traditionally driven by smartphone and PC demand, FormFactor is expected to match its 2021 revenue levels as it exits 2024.
During the roadshow, FormFactor's CEO Mike Slessor, CFO Shai Shahar, and IR Stan Finkelstein discussed the company's prospects and current market dynamics. Stifel's analysis suggests that while the signals for growth in certain markets remain muted as the company enters 2025, FormFactor's status as a leading supplier of advanced probe cards is further reinforced.
The analysts noted FormFactor's success in maintaining its market-leading position, which has been a key factor in the company's performance. Despite the current equilibrium in risk-reward, the Stifel team is closely watching for a more strategic opportunity to adjust their stance on the stock.
FormFactor's financial trajectory appears to be stable, with the company poised to sustain revenue levels similar to those seen in its peak year of 2021. The company's solid fundamentals are reflected in its impressive current ratio of 4.76 and revenue growth of 12.3% over the last twelve months.
The analysts' commentary underscores a cautious optimism about FormFactor's ability to leverage its industry leadership in advanced probe cards, even as it faces tepid growth in other sectors. InvestingPro subscribers can access 8 additional key insights and a comprehensive Pro Research Report, which provides deep-dive analysis of FormFactor's market position and growth prospects..
In other recent news, FormFactor Inc. reported a record-breaking revenue of $207.9 million for the third quarter of 2024, marking a 5.3% sequential increase and a 21.2% rise from the previous year. Despite this robust growth, the company anticipates a reduction in Foundry and Logic probe-card demand, while expecting DRAM probe-card revenue to continue growing in Q4, particularly with initial HBM4 designs.
In addition, FormFactor shares have been upgraded from Neutral to Buy by Citi analysts, who forecast robust demand for High Bandwidth Memory (HBM) in 2025. This upgrade is also based on FormFactor's strong position in the HBM sector, particularly with its dominant share at SK Hynix's HBM business.
In other semiconductor equipment companies, Nova Measuring (NASDAQ:NVMI) Instruments, Veeco Instruments (NASDAQ:VECO), MKS Instruments (NASDAQ:MKSI), Advanced Energy Industries (NASDAQ:AEIS), and FormFactor have seen their stocks rise following a series of upgrades by analysts at Citi. Despite facing a challenging environment due to various factors, analysts believe the risk-reward for these companies is now skewed to the upside.
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