Incannex Healthcare Halted, News Pending
On Thursday, Evercore ISI lowered the price target for FormFactor (NASDAQ:FORM) to $33.00 from $43.00, while maintaining an In Line rating on the stock. The adjustment followed FormFactor’s announcement that its March quarter earnings per share (EPS) were 22% higher than Street estimates, and its June quarter EPS outlook is 4% above expectations. The company’s stock traded up 8% in after-hours trading on the back of this news. Currently trading at $28.14 with a market capitalization of $2.17 billion, InvestingPro analysis shows FormFactor trading near its Fair Value, with a strong financial health score of 2.62 (rated as GOOD).
FormFactor’s management anticipates DRAM Probe revenues to reach record levels in the June quarter, signaling a substantial quarterly growth in High Bandwidth (NASDAQ:BAND) Memory (HBM) revenues, despite stable trends in non-HBM DRAM. The company has guided for a second-quarter revenue increase of 11% quarter over quarter to $190 million. With a robust current ratio of 4.61 and more cash than debt on its balance sheet, FormFactor maintains strong operational flexibility. InvestingPro subscribers can access 8 additional key insights about FormFactor’s financial position and growth prospects. This forecast excludes millions in revenues related to multinational China revenues that cannot benefit from Free Trade Zones, and a 100 basis point impact on Gross Margin, primarily related to Probe, where 80% of manufacturing occurs within the US.
The company reported an 8% quarterly decline in HBM revenues for the March quarter but expects a 38% increase in the June quarter. Management reaffirmed its expectation for year-over-year growth in HBM revenues by 2025, driven by current HBM3E designs, anticipated HBM4 shipments set to ramp up in the second half of 2025, and contributions from FormFactor’s second DRAM customer.
Despite the positive growth in Foundry/Logic (F/L) Probe card revenues, which grew 2% quarter over quarter in the first quarter and are expected to grow in the high single digits into the June quarter, the outlook for the second half of 2025 remains uncertain due to potential demand destruction from persistent tariffs. Additionally, the risk of increased reuse of Intel (NASDAQ:INTC)’s older generation CPU products presents a further challenge.
On a positive note, management indicated that System revenues are expected to grow quarter over quarter, with Coherent (NYSE:COHR) Optical Processing Unit (CPO) using Silicon Photonics as a key driver. FormFactor is optimistic about its role in the industry, citing plans to build upon its leadership within R&D labs, where it has an installed base of over 100 systems, and noting shipments of multiple systems to a customer for pilot production of the industry’s first high volume Silicon Photonics-based optics circuit.
In other recent news, FormFactor Inc. reported its Q1 2025 earnings, revealing a mixed financial performance. The company posted earnings per share (EPS) of $0.23, which fell short of the anticipated $0.33. However, revenue slightly exceeded expectations at $171.4 million, surpassing the forecasted $169.99 million. Despite the EPS miss, FormFactor’s strategic focus on high bandwidth memory and advanced packaging technologies appears to have bolstered investor confidence. Analysts from Needham and Company and B. Riley Securities have shown interest in the company’s strategic direction, particularly in high-growth areas like co-package optics and DRAM probe cards. The company also completed the acquisition of FICT Limited, enhancing its access to multilayer organic substrates, a crucial component for advanced packaging. Looking ahead, FormFactor has set a revenue outlook for Q2 2025 at $190 million, with a non-GAAP EPS target of $0.30, although tariffs are expected to impact Q2 revenue slightly.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.