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Investing.com - Stifel raised its price target on FormFactor (NASDAQ:FORM) to $42.00 from $35.00 on Thursday, while maintaining a Hold rating on the semiconductor testing equipment provider. The stock currently trades at $47.72, significantly above Stifel’s target and InvestingPro Fair Value estimates, with a P/E ratio of 83.
The research firm cited FormFactor ’s strong third-quarter performance that exceeded both Stifel’s and consensus expectations, along with raised guidance for the fourth quarter. High Bandwidth Memory (HBM) was identified as the primary growth driver, returning to record levels in the third quarter. This performance has contributed to FormFactor’s impressive 69.6% price return over the past six months.
DRAM products represented 34% of FormFactor’s sales in the quarter, marking the highest concentration in a decade. Stifel noted this increased DRAM exposure is now positive for the company, with HBM packaging driving test intensity and growth.
The outlook for fourth-quarter growth includes contributions from non-HBM DRAM probe cards, including opportunistic LPDDR4 products, alongside system sales. Consumer-oriented PC and smartphone activity remains weak, with neither Intel nor TSMC accounting for more than 10% of sales.
Stifel highlighted management’s focus on structural gross margin improvement, with several initiatives already showing results in the second half of 2025. Despite the positive developments and potential new CPU and GPU opportunities in 2026, Stifel maintained its Hold rating based on the stock’s valuation at 31 times estimated calendar year 2026 earnings. InvestingPro data confirms this valuation concern, showing an EV/EBITDA of 40.7 and that the RSI suggests the stock is in overbought territory. Get access to over a dozen more ProTips and FormFactor’s comprehensive research report on InvestingPro.
In other recent news, FormFactor Inc. reported its third-quarter earnings for 2025, surpassing market expectations. The company achieved an earnings per share (EPS) of $0.33, outperforming the forecasted $0.25. Additionally, FormFactor’s revenue exceeded predictions, reaching $202.7 million compared to the anticipated $199.97 million. These results reflect positively on the company’s financial performance. The earnings announcement has garnered attention from investors, indicating a strong response to the company’s latest financial disclosures. Furthermore, the company’s stock experienced a notable increase in after-hours trading, demonstrating investor confidence. These developments are part of the recent highlights concerning FormFactor’s financial activities.
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