Advertisement
Singapore markets close in 6 hours 14 minutes

  • Straits Times Index

    3,293.21
    +5.46 (+0.17%)
     

  • Nikkei

    37,787.96
    +159.48 (+0.42%)
     

  • Hang Seng

    17,541.07
    +256.53 (+1.48%)
     

  • FTSE 100

    8,078.86
    +38.48 (+0.48%)
     

  • Bitcoin USD

    64,437.27
    +221.01 (+0.34%)
     

  • CMC Crypto 200

    1,392.22
    +9.65 (+0.70%)
     

  • S&P 500

    5,048.42
    -23.21 (-0.46%)
     

  • Dow

    38,085.80
    -375.12 (-0.98%)
     

  • Nasdaq

    15,611.76
    -100.99 (-0.64%)
     

  • Gold

    2,346.50
    +4.00 (+0.17%)
     

  • Crude Oil

    83.84
    +0.27 (+0.32%)
     

  • 10-Yr Bond

    4.7060
    +0.0540 (+1.16%)
     

  • FTSE Bursa Malaysia

    1,572.79
    +3.54 (+0.23%)
     

  • Jakarta Composite Index

    7,117.31
    -37.99 (-0.53%)
     

  • PSE Index

    6,554.82
    -20.06 (-0.31%)
     

Why Is FormFactor (FORM) Up 6% Since Last Earnings Report?

Zacks Equity Research
·3-min read

It has been about a month since the last earnings report for FormFactor (FORM). Shares have added about 6% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is FormFactor due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

FormFactor Q1 Earnings & Revenues Beat Estimates

FormFactor Inc. reported first-quarter adjusted earnings of 33 cents per share, beating the Zacks Consensus Estimate of 21 cents. The figure decreased 19.5% sequentially but increased 65% year over year.

ADVERTISEMENT

Revenues increased 21.6% from the year-ago quarter but decreased 10% sequentially to $160.8 million. The top line outpaced the Zacks Consensus Estimate by 14.7%.

The top line was driven by strong demand for both Foundry & Logic probe cards. Customer node transitions and new design releases also aided revenues.

Management continues to expect strong demand for Foundry & Logic probe cards in the near term. Though the company saw a sequential reduction in DRAM probe card demand in the first quarter, it expects long-term DRAM probe card demand to likely remain solid.

Quarter Details

Probe card segment revenues were $135 million in the first quarter, down 12% from the fourth quarter.

Within the probe card segment, Foundry & Logic sales (accounting for 66% of its total revenues) increased 1% on a sequential basis to $106 million.

Revenues for DRAM products (15% of revenues) were $25 million, down $18 million from the fourth quarter.

Flash revenues were $4.3 million, down on a sequential basis.

Systems revenues in the first quarter were $26 million, up 2% sequentially.

Operating Details

On a non-GAAP basis, gross margin expanded 40 basis points (bps) year over year and 200 bps sequentially to 46.1%. The increase was mainly due to higher gross margin in the Systems segment.

Non-GAAP operating expenses were $42.7 million in the first quarter, up from $38.1 million in the prior-year period. The increase was due to higher R&D investments.

Balance Sheet & Cash Flow

At the end of the first quarter, cash and cash equivalents, as well as marketable securities were $239.4 million compared with $220.9 million in the fourth quarter.

Cash flow from operations was $39.3 million in the first quarter versus $37.7 million in the fourth quarter. Free cash flow was $27.6 million, down from $31.6 million in the fourth quarter.

Guidance

FormFactor did not provide any guidance for the second quarter due to risks and uncertainties related to the COVID-19 crisis.

How Have Estimates Been Moving Since Then?

Estimates revision followed a flat path over the past two months.

VGM Scores

Currently, FormFactor has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

FormFactor has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
FormFactor, Inc. (FORM) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.