FormFactor, Inc. Fundamental Analysis (NASDAQ: FORM)
FormFactor, Inc. (NASDAQ: FORM) shows weak financial fundamentals with a PE ratio of 73.68, profit margin of 12.80%, and ROE of 10.96%. The company generates $0.9B in annual revenue with weak year-over-year growth of 2.80%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 55.8/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze FORM's fundamental strength across five key dimensions:
Efficiency Score
WeakFORM struggles to generate sufficient returns from assets.
Valuation Score
ModerateFORM shows balanced valuation metrics.
Growth Score
WeakFORM faces weak or negative growth trends.
Financial Health Score
ExcellentFORM maintains a strong and stable balance sheet.
Profitability Score
WeakFORM struggles to sustain strong margins.
Key Financial Metrics
Is FORM Expensive or Cheap?
P/E Ratio
FORM trades at 73.68 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, FORM's PEG of 0.46 indicates potential undervaluation.
Price to Book
The market values FormFactor, Inc. at 7.65 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 50.14 times EBITDA. This signals the market has high growth expectations.
How Well Does FORM Make Money?
Net Profit Margin
For every $100 in sales, FormFactor, Inc. keeps $12.80 as profit after all expenses.
Operating Margin
Core operations generate 16.86 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.96 in profit for every $100 of shareholder equity.
ROA
FormFactor, Inc. generates $8.60 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
FormFactor, Inc. produces operating cash flow of $179.79M, showing steady but balanced cash generation.
Free Cash Flow
FormFactor, Inc. generates strong free cash flow of $136.16M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.75 in free cash annually.
FCF Yield
FORM converts 1.61% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
73.68
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.46
vs 25 benchmark
P/B Ratio
Price to book value ratio
7.65
vs 25 benchmark
P/S Ratio
Price to sales ratio
9.42
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.02
vs 25 benchmark
Current Ratio
Current assets to current liabilities
4.08
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.11
vs 25 benchmark
ROA
Return on assets percentage
0.09
vs 25 benchmark
ROCE
Return on capital employed
0.13
vs 25 benchmark
How FORM Stacks Against Its Sector Peers
| Metric | FORM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 73.68 | 35.65 | Worse (Expensive) |
| ROE | 10.96% | 651.00% | Weak |
| Net Margin | 12.80% | -138740.00% (disorted) | Strong |
| Debt/Equity | 0.02 | 0.26 | Strong (Low Leverage) |
| Current Ratio | 4.08 | 5.96 | Strong Liquidity |
| ROA | 8.60% | 227.00% | Weak |
FORM outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews FormFactor, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
12.20%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
-31.37%
Industry Style: Growth, Innovation, High Beta
DecliningFCF CAGR
-32.41%
Industry Style: Growth, Innovation, High Beta
Declining