How does formfactor, inc. make money?

formfactor, inc. generates $785M in annual revenue (annual revenue · their business grew +2.8% last year).

What is FORM's XVARY composite score?

formfactor, inc. (FORM) has an XVARY composite score of 63/100, rated average. This combines growth, value, risk, and momentum factors.

FORM — formfactor, inc. stock analysis

Start here if you're new

what it is

FormFactor makes the hardware used to test chips before they leave the wafer, so bad silicon gets caught before it gets expensive.

how it gets paid

Last year Formfactor made $785M in revenue. DRAM probe cards was the main engine at $298M, or 38% of sales.

why it's growing
Revenue grew 2.8% last year. Revenue in the latest quarter was $570M, up 181% vs. prior year, and gross margin was 38.3%.

what just happened

Latest earnings worked because EPS came in at $0.46, ahead of the $0.37 estimate by 24.32%.

At a glance

B+ balance sheet — decent shape, but not bulletproof

30/100 earnings predictability — expect surprises

69.0x trailing p/e — you're paying up for this one

14.5% return on capital — nothing to write home about

xvary composite: 63/100 — average

What they do

FormFactor makes the hardware used to test chips before they leave the wafer, so bad silicon gets caught before it gets expensive.

FormFactor sits in the ugly middle of chipmaking where failure is expensive. Its tools touch DRAM, NAND, and system-on-chip wafers, and foreign sales were 81% of 2025 revenue, which tells you large global customers already trust it. Probe cards are consumable test gear, which means customers need performance and repeat orders, not just a one-time box.

semiconductors mid-cap test-equipment ai-memory wafer-test

How they make money

$785M annual revenue · their business grew +2.8% last year

DRAM probe cards

$298M

+12.0%

Foundry & logic probe cards

$267M

+2.0%

Flash / storage probe cards

$126M

8.0%

Systems & engineering

$94M

+5.0%

The products that matter

tests chips before packaging

Semiconductor Probe Cards

$785M revenue · 100% of reported sales

it's the core business and the full reported revenue base at $785M. if customers cut test spending, you feel it across the entire company.

100% of sales

service and support work

Support and Service Work

inside the $785M total

this page does not break out service revenue on its own. what you do know is that any recurring support dollars sit inside the same $785M top line and help smooth a cyclical hardware business.

not separately disclosed

custom test configurations

Custom Test Work

inside the $785M total

specialized work can support margin, but there is no clean segment breakout here. you are underwriting the full $785M business, not a separately disclosed higher-margin side business.

thin disclosure

Key numbers

69.0x

trailing p/e

This is the whole argument in one number. You are paying a growth multiple for a company that grew revenue 2.8% last year.

$785M

annual revenue

This tells you FormFactor is real scale, but not giant scale, which makes every major customer and cycle swing matter more.

7.3%

operating margin

Operating margin means profit after running the business. Plain English: the cushion is thin if demand softens.

14.5%

return on capital

Return on capital means profit earned on the money used in the business. So what: the company is decent, not magical, at turning investment into profit.

Financial health

B+

strength

balance sheet grade B+ — solid but not elite
risk rank 3 — safer than 50% of stocks
price stability 15 / 100
long-term debt $11M (0% of capital)
net profit margin 20.0% — keeps 20 cents of every dollar in revenue
return on equity 14% — $0.14 profit for every $1 investors have put in

B+ — functional but not a standout on the balance sheet.

Total return vs. market

You invested $10,000 in FORM 3 years ago → it's now worth $30,840.

The index would have given you $14,540.

same period. same starting point. FORM beat the market by $16,300.

source: institutional data · total return

What just happened

beat estimates

Latest earnings worked because EPS came in at $0.46, ahead of the $0.37 estimate by 24.32%.

Revenue in the latest quarter was $570M, up 181% vs. prior year, and gross margin was 38.3%. That said, full-year 2025 revenue only grew 2.8% to $785M, so one hot quarter does not erase a slow year.

$570M

revenue

$0.46

eps

38.3%

gross margin

the number that mattered

The key number was the 24.32% EPS beat because it showed costs and mix improved faster than analysts expected.

formfactor posted mixed results in 2025.
revenues fell short of year-ago totals in the second and third quarters and saw only minimal growth in the first quarter.
a stronger fourth-quarter showing helped to make up the lack, but even so, the company only posted top-line growth of 3% for the full year.
as for the bottom line, adjusted earnings per share rose by 12% in 2025.

there were several issues which contributed to the rocky performance, including tariffs, but perhaps the most notable was the current demand environment related to artificial intelligence (ai). while some of formfactor’s offerings have benefitted from increased ai-related demand, that demand has been highly concentrated, leaving the rest of the company’s catalog in the cold.
as a result of these factors, results were hampered throughout the year, though the fourth-quarter saw the beginnings of a recovery, with the top line up 14% vs. prior year and the bottom line up 70%.

source: company earnings report, 2026

What could go wrong

the #1 risk is semiconductor test demand rolling over after a narrow ai-led rebound.

∘

med

one revenue line means no place to hide

FORM reported $785M of revenue last year from one line of business. If customers slow wafer starts, delay capacity adds, or keep working through inventory, the whole model feels it.

This is concentration risk in plain English: 100% of reported sales are tied to the semiconductor test cycle.

∘

med

ai demand stays narrow

Recent demand improved, but management's own framing says the benefit was stronger in some products than others. If AI spending stays concentrated instead of broadening, the rebound looks better in slides than in revenue.

That matters because the stock trades at 69.0x trailing earnings while full-year sales growth was only 3%.

∘

med

tariffs and cross-border friction

Tariffs were part of the rough 2025 setup. In semiconductor hardware, even small shipment delays or cost increases can pressure margins before the revenue line shows the damage.

FORM's 17.9% net margin gives it room. It does not give you unlimited room.

∘

med

multiple compression

The 3–5 year target midpoint sits at $79 versus a current price of $89.04. Analysts can like the business and still think the stock already ran ahead of the fundamentals.

If revenue stays closer to last year's $785M than the $915M estimate, valuation has room to fall before the balance sheet becomes the story.

With $785M in annual revenue, one reported business line, and a premium valuation, FORM's risk picture is less about debt and more about how fast a narrow rebound turns into broad demand.

source: institutional data · regulatory filings · risk analysis

Pay attention to

metric

whether revenue starts catching up to the $915M estimate

Last year delivered $785M. That gap is the bet. If revenue does not move toward the estimate, the multiple has less to stand on.

trend

if the Q4 rebound spreads beyond the strongest ai-linked pockets

A 14% jump in quarterly revenue from a year ago helped. The catch is whether more of the catalog joins in next.

risk

tariffs, shipping friction, and margin pressure

Management already pointed to tariffs during the rough patch. In hardware, that kind of friction often hits profitability before it hits reported demand.

earnings

whether profit keeps outrunning sales for the right reasons

Full-year EPS was $2.25 while sales rose 3%. If profit momentum fades before revenue broadens, the premium setup gets harder to defend.

Analyst rankings

short-term outlook

top 20%

momentum score 2 — analysts expect above-average price performance in the year ahead. in human-speak, they still think the near-term setup works.

risk profile

average

stability score 3 — this is not a bunker stock, but it is not the wildest name in semis either.

chart momentum

average

technical score 3 — the chart says constructive, not euphoric.

earnings predictability

30 / 100

the translation is simple: if you own FORM, your quarter-to-quarter ride can get bumpy fast.

source: institutional data

Institutional activity

institutions have been net buying for 2 consecutive quarters — 130 buyers vs. 93 sellers in 4q2025. total institutional holdings: 78.5M shares. net buying for 2 quarters.

source: institutional data · 2q2025-4q2025

source: institutional data

Price targets

3-5 year target range

$30 $127

$89 current price

$79 target midpoint · 11% from current · 3-5yr high: $127

source: institutional data · analyst targets

The deep dive

FORM

xvary deep dive

form

the full analysis is in the works.

what you'll get

dcf valuation model

bull / base / bear scenarios

competitive moat breakdown

quarterly earnings tracker

operating model projections

risk matrix with kill criteria

original price target + conviction

updated with every earnings

free · no spam · you'll be first to read it

form

Get this snapshot in your inbox

Want the deeper analysis?