FormFactor Faces 45% Downside Amid Hedgeye's Short Call
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 23 2026
0mins
Should l Buy FORM?
Source: seekingalpha
FormFactor Inc (FORM) dropped 9.59% and hit a 5-day low amid negative analyst sentiment.
Hedgeye analyst Felix Wang issued a short call on FormFactor, highlighting that the stock's valuation is extreme at approximately 50x blended 2026/2027 earnings, with a potential 45% downside. The analyst pointed out that Intel's recent downward guidance has undermined market expectations for a significant earnings beat on February 4th, leading to increased valuation pressure and concerns about future profitability in the cooling semiconductor capital equipment sector.
The implications of this analysis suggest that investors should be cautious, as the combination of high valuation and negative industry dynamics could lead to further declines in FormFactor's stock price.
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Analyst Views on FORM
Wall Street analysts forecast FORM stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for FORM is 57.00 USD with a low forecast of 42.00 USD and a high forecast of 78.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
10 Analyst Rating
5 Buy
5 Hold
0 Sell
Moderate Buy
Current: 83.870
Low
42.00
Averages
57.00
High
78.00
Current: 83.870
Low
42.00
Averages
57.00
High
78.00
About FORM
FormFactor, Inc. is a provider of essential test and measurement technologies along the full semiconductor product lifecycle, from characterization, modeling, reliability, and design de-bug to qualification and production test. The Company provides a range of high-performance probe cards, analytical probes, probe stations, thermal systems, and cryogenic systems to both semiconductor companies and scientific institutions. Its products provide electrical and optical information from a variety of semiconductor and electro-optical devices and integrated circuits from early research, through development, to high-volume production. It operates in two segments: Probe Cards and the Systems. The Probe Cards segment includes sales of its probe cards and analytical probes. The Systems segment includes sales of its probe stations, thermal systems and cryogenic systems. It also offers optical probing technology for silicon photonics (SiPh) and co-packaged optics (CPO) wafer testing.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
FormFactor Reports Strong Q4 Results and Upbeat Guidance
- Strong Earnings: FormFactor reported Q4 earnings of $0.46 per share, exceeding the market expectation of $0.35 and significantly up from $0.27 a year ago, indicating a notable improvement in profitability.
- Revenue Growth: The company achieved Q4 revenue of $215.16 million, a 13.6% year-over-year increase, surpassing analyst expectations and reflecting robust market demand recovery.
- Optimistic Outlook: FormFactor expects Q1 adjusted earnings between $0.41 and $0.49 per share, well above the $0.32 projected by analysts, with revenue guidance of $220 million to $230 million, showcasing strong growth potential.
- Strong Technical Setup: FormFactor's stock is currently trading above key moving averages, indicating strong bullish momentum, with a 105.17% increase over the past 12 months, nearing its 52-week high, reflecting market confidence in its future performance.
See More
FormFactor Exceeds Q4 2025 Revenue and Margin Expectations
- Strong Performance: FormFactor reported Q4 2025 revenues of $215.2 million, exceeding expectations and reflecting a 24.5% increase from Q3, while achieving a GAAP gross margin of 42.2%, up 2.4 percentage points sequentially, indicating robust market performance and growth potential.
- Optimistic Outlook: Management projects Q1 2026 revenues around $225 million, with gross margins expected to reach 45%, demonstrating confidence in ongoing operational improvements and tariff mitigation efforts, which are anticipated to further enhance profitability.
- Market Leadership: CEO Slessor highlighted record performance in the DRAM probe card market, particularly in HBM, forecasting another record-breaking quarter, reflecting strong demand and market share growth in high-performance computing and advanced packaging sectors.
- Strategic Investment and Acquisition: The December acquisition of Keystone Photonics enhances FormFactor's technological leadership in co-packaged optics testing, indicating the company's ongoing commitment to innovation and market expansion aimed at capturing future growth opportunities.
See More
FormFactor (FORM) Q4 2025 Earnings Call Transcript
See More
FormFactor Q4 Earnings Exceed Expectations with Strong Revenue Growth
- Earnings Beat: FormFactor reported a Q4 non-GAAP EPS of $0.46, surpassing expectations by $0.11, indicating strong performance and improved profitability in the semiconductor testing sector.
- Significant Revenue Growth: The company achieved Q4 revenue of $215.1 million, reflecting a 13.5% year-over-year increase and exceeding market expectations by $4.5 million, showcasing sustained demand in the market.
- Optimistic Outlook: For Q1 2026, FormFactor projects revenue to fluctuate around $225 million with a gross margin target of 34%, reflecting confidence in future market demand and ongoing profitability.
- Increased Net Income Expectations: The anticipated net income per diluted share is $0.34, significantly higher than the previous year, indicating improvements in cost control and operational efficiency that will drive future profitability.
See More
FormFactor to Announce Q4 Earnings on February 4
- Earnings Announcement: FormFactor (FORM) is set to release its Q4 2023 earnings on February 4 after market close, with consensus EPS estimates at $0.35, reflecting a 29.6% year-over-year increase, indicating ongoing improvements in profitability.
- Revenue Growth Expectations: Analysts project revenue to reach $210.6 million, marking an 11.1% year-over-year increase, showcasing the company's robust performance and demand growth in the semiconductor testing market.
- Historical Performance Review: Over the past two years, FormFactor has beaten EPS estimates 50% of the time and revenue estimates 88% of the time, demonstrating stability in financial performance and market confidence.
- Market Analysis Insights: Recent analyses suggest that FormFactor is benefiting from the memory shortage trend, which is expected to drive future performance growth and further solidify its competitive position in the technology sector.
See More
FormFactor (FORM) Drops 2.1% Amid Hedgeye's Short Call with 45% Downside Potential
- Short Call Impact: Hedgeye analyst Felix Wang noted that FormFactor's stock has more than tripled from cycle lows, now trading at approximately 50x blended 2026/2027 earnings, indicating an extreme valuation with little margin for error.
- Skewed Market Expectations: Despite widespread anticipation for a significant beat-and-raise on February 4th, Intel's downward guidance has meaningfully undermined this setup, potentially leading to market disappointment.
- Increased Valuation Pressure: With fading HBM tailwinds, ongoing share losses, and elevated earnings expectations, Hedgeye estimates a 45% downside to fair value for FormFactor, presenting an asymmetric short opportunity.
- Changing Industry Dynamics: Amid a cooling environment in the semiconductor capital equipment sector, Hedgeye is reassessing its hedging strategies for FormFactor, suggesting that the challenges faced by the company will impact its future profitability.
See More
FormFactor Reports Strong Q4 Results and Upbeat Guidance
- Strong Earnings: FormFactor reported Q4 earnings of $0.46 per share, exceeding the market expectation of $0.35 and significantly up from $0.27 a year ago, indicating a notable improvement in profitability.
- Revenue Growth: The company achieved Q4 revenue of $215.16 million, a 13.6% year-over-year increase, surpassing analyst expectations and reflecting robust market demand recovery.
- Optimistic Outlook: FormFactor expects Q1 adjusted earnings between $0.41 and $0.49 per share, well above the $0.32 projected by analysts, with revenue guidance of $220 million to $230 million, showcasing strong growth potential.
- Strong Technical Setup: FormFactor's stock is currently trading above key moving averages, indicating strong bullish momentum, with a 105.17% increase over the past 12 months, nearing its 52-week high, reflecting market confidence in its future performance.
See More
FormFactor Exceeds Q4 2025 Revenue and Margin Expectations
- Strong Performance: FormFactor reported Q4 2025 revenues of $215.2 million, exceeding expectations and reflecting a 24.5% increase from Q3, while achieving a GAAP gross margin of 42.2%, up 2.4 percentage points sequentially, indicating robust market performance and growth potential.
- Optimistic Outlook: Management projects Q1 2026 revenues around $225 million, with gross margins expected to reach 45%, demonstrating confidence in ongoing operational improvements and tariff mitigation efforts, which are anticipated to further enhance profitability.
- Market Leadership: CEO Slessor highlighted record performance in the DRAM probe card market, particularly in HBM, forecasting another record-breaking quarter, reflecting strong demand and market share growth in high-performance computing and advanced packaging sectors.
- Strategic Investment and Acquisition: The December acquisition of Keystone Photonics enhances FormFactor's technological leadership in co-packaged optics testing, indicating the company's ongoing commitment to innovation and market expansion aimed at capturing future growth opportunities.
See More
FormFactor (FORM) Q4 2025 Earnings Call Transcript
See More
FormFactor Q4 Earnings Exceed Expectations with Strong Revenue Growth
- Earnings Beat: FormFactor reported a Q4 non-GAAP EPS of $0.46, surpassing expectations by $0.11, indicating strong performance and improved profitability in the semiconductor testing sector.
- Significant Revenue Growth: The company achieved Q4 revenue of $215.1 million, reflecting a 13.5% year-over-year increase and exceeding market expectations by $4.5 million, showcasing sustained demand in the market.
- Optimistic Outlook: For Q1 2026, FormFactor projects revenue to fluctuate around $225 million with a gross margin target of 34%, reflecting confidence in future market demand and ongoing profitability.
- Increased Net Income Expectations: The anticipated net income per diluted share is $0.34, significantly higher than the previous year, indicating improvements in cost control and operational efficiency that will drive future profitability.
See More
FormFactor to Announce Q4 Earnings on February 4
- Earnings Announcement: FormFactor (FORM) is set to release its Q4 2023 earnings on February 4 after market close, with consensus EPS estimates at $0.35, reflecting a 29.6% year-over-year increase, indicating ongoing improvements in profitability.
- Revenue Growth Expectations: Analysts project revenue to reach $210.6 million, marking an 11.1% year-over-year increase, showcasing the company's robust performance and demand growth in the semiconductor testing market.
- Historical Performance Review: Over the past two years, FormFactor has beaten EPS estimates 50% of the time and revenue estimates 88% of the time, demonstrating stability in financial performance and market confidence.
- Market Analysis Insights: Recent analyses suggest that FormFactor is benefiting from the memory shortage trend, which is expected to drive future performance growth and further solidify its competitive position in the technology sector.
See More
FormFactor (FORM) Drops 2.1% Amid Hedgeye's Short Call with 45% Downside Potential
- Short Call Impact: Hedgeye analyst Felix Wang noted that FormFactor's stock has more than tripled from cycle lows, now trading at approximately 50x blended 2026/2027 earnings, indicating an extreme valuation with little margin for error.
- Skewed Market Expectations: Despite widespread anticipation for a significant beat-and-raise on February 4th, Intel's downward guidance has meaningfully undermined this setup, potentially leading to market disappointment.
- Increased Valuation Pressure: With fading HBM tailwinds, ongoing share losses, and elevated earnings expectations, Hedgeye estimates a 45% downside to fair value for FormFactor, presenting an asymmetric short opportunity.
- Changing Industry Dynamics: Amid a cooling environment in the semiconductor capital equipment sector, Hedgeye is reassessing its hedging strategies for FormFactor, suggesting that the challenges faced by the company will impact its future profitability.
See More
