Is FormFactor Inc. (FORM) A Good Investment?

FormFactor Inc. (NASDAQ:FORM) finished Friday with an addition of $0.99 to close at $37.15, an upside of 2.74 percent. An average of 240,240 shares of common stock have been traded in the last five days. There was a gain of $1.18 in the past week, and it reached a new high 23 times over the past 12 months. The last 20 days have seen an average of 249,155 shares traded, while the 50-day average volume stands at 278,598.

FORM stock has decreased by -8.09% in the last month. The company shares reached their 1-month lowest point of $34.72 on 10/13/21. With the stock rallying to its 52-week high on 02/16/21, shares of the company touched a low of $27.77 and a high of $52.39 in 52 weeks. It has reached a new high 7 times so far this year and lost -13.64% or -$5.87 in price. In spite of this, the price is down -29.09% from the 52-week high.


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Insider Transactions

150 days have passed since FormFactor Inc. (FORM) last reported insider trading activity. SLESSOR MIKE, who is CEO, most recently acquired $15,010 shares at $34.68 per share on May 26. In this transaction, the insider spent $520,511. Director, Rhodes Sheri, disposed of 3,549 shares at a price of $34.50 on May 18. The insider now owns more than $122,453 worth of shares. Prior to that, Director LINK RAYMOND A went on to Sale 3,500 shares at $34.49 each on May 18. An amount of $120,711 was transacted.

Valuation Metrics

FormFactor Inc. (FORM) has a trailing price-to-earnings (P/E) ratio of 37.11, which compares with the 31.10 for the broader industry and 38.99 for the sector. In the last five years, FormFactor Inc.’s PE ratio has ranged between 74.69 and 9.333. The stock’s beta is 1.37. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 3.87, the price-to-book (PB) ratio at 3.74, and the price-to-cash flow ratio at 28.30.

The quick ratio of FormFactor Inc. for the three months ended June 29 was 2.50, and the current ratio was 3.20, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.03 and a total debt to equity ratio of 0.04 for the quarter ending June 29. FormFactor Inc.’s EBITDA margin for the year ending June 29 is 22.37%, while its operating margin for the same period stands at 11.40%. Its gross profit as reported stood at $287.92 million compared to revenue of $693.62 million.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, FormFactor Inc.’s return on assets was 8.30%. For the broader industry, ROE averaged -0.25 over the past year.

Earnings Surprise

For the three-month period that ended June 29, FormFactor Inc. had $95.96 million in cash and short-term investments compared to $20.12 million in total debt. In the quarter under review, the net income was up than the previous quarter. The company posted a net income of $17.91 million in the quarter, while revenues of $19.63 million were shrunk -14.29%. The analyst consensus anticipated FormFactor Inc.’s latest quarter earnings to come in at $0.32 per share, but it turned out to be $0.36, a 12.50% surprise. For the quarter, EBITDA amounted to $33.99 million. Shareholders own equity worth $77.67 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at FormFactor Inc. (FORM) price momentum. RSI 9-day as of the close on 22 October was 57.42%, suggesting the stock is Neutral, with historical volatility in this time frame at 29.43%.

As of today, FORM’s price is $36.26 +3.28% or $1.18 from its 5-day moving average. FORM is currently trading -7.95% lower than its 20-day SMA and +6.91% higher than its 100-day SMA. However, the stock’s current price level is +5.54% above the SMA50 and -18.32% below the SMA200.

The stochastic %K and %D were 53.38% and 39.98%, respectively, and the average true range (ATR) was 1.10. With the 14-day stochastic at 87.10% and the average true range at 1.12, the RSI (14) stands at 52.28%. The stock has reached 0.36 on the 9-day MACD Oscillator while the 14-day reading was at 0.38.

Analyst Ratings

DA Davidson downgraded FormFactor Inc. (NASDAQ: FORM) to a a Neutral rating in its most recent analyst report. Previously, the stock was rated as a Buy. The consensus rating for FormFactor Inc. (FORM) among analysts is Buy. According to current brokerage recommendations, 0 brokerage firms advise that investors sell FORM, while 1 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 1 analysts, while 6 others rate it as a “buy”.

What is FORM’s price target for the next 12 months?

Analysts predict a range of price targets between $42.00 and $60.00, with a median target of $50.00. Taking a look at these predictions, the average price target given by analysts for FormFactor Inc. (FORM) stock is $50.00.

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