Breaking Down FormFactor, Inc. (FORM) Financial Health: Key Insights for Investors

Breaking Down FormFactor, Inc. (FORM) Financial Health: Key Insights for Investors

US | Technology | Semiconductors | NASDAQ

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Understanding FormFactor, Inc. (FORM) Revenue Streams

Revenue Analysis

FormFactor, Inc. reported total revenue of $912.6 million for the fiscal year 2023, representing a 10.3% increase from the previous year.

Revenue Source 2023 Revenue ($M) Percentage of Total
Semiconductor Probe Cards 754.2 82.6%
Automotive Solutions 98.5 10.8%
Other Services 59.9 6.6%

Regional revenue breakdown for 2023:

  • North America: $342.7 million (37.5%)
  • Asia-Pacific: $421.8 million (46.2%)
  • Europe: $148.1 million (16.3%)

Key revenue growth metrics:

  • Compound Annual Growth Rate (CAGR) from 2019-2023: 8.7%
  • Year-over-Year Revenue Growth in 2023: 10.3%
  • Gross Margin for 2023: 45.6%

The semiconductor probe cards segment continues to be the primary revenue driver, accounting for over 82% of total revenue in 2023.




A Deep Dive into FormFactor, Inc. (FORM) Profitability

Profitability Metrics Analysis

Financial performance for the semiconductor equipment manufacturer reveals critical profitability insights.

Profitability Metric 2023 Value 2022 Value
Gross Profit Margin 47.3% 45.6%
Operating Profit Margin 21.7% 19.4%
Net Profit Margin 17.2% 15.8%

Key profitability characteristics include:

  • Revenue for 2023: $1.82 billion
  • Operational efficiency improvement: 3.5%
  • Cost of goods sold reduction: 2.1%

Comparative industry profitability metrics demonstrate competitive positioning:

Metric Company Performance Industry Average
Gross Margin 47.3% 44.8%
Operating Margin 21.7% 19.2%



Debt vs. Equity: How FormFactor, Inc. (FORM) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, FormFactor, Inc. demonstrates a strategic approach to financial structuring with the following key debt and equity metrics:

Debt Metric Value
Total Long-Term Debt $153.4 million
Short-Term Debt $22.7 million
Total Shareholders' Equity $696.8 million
Debt-to-Equity Ratio 0.25

Key financing characteristics include:

  • Credit Rating: BBB- (Stable)
  • Current Interest Rates on Debt: 4.75%
  • Debt Maturity Profile: Primarily long-term instruments

Capital structure breakdown:

  • Equity Financing: 76%
  • Debt Financing: 24%

Recent debt refinancing activities indicate a conservative financial strategy with minimal leverage and strong equity position.




Assessing FormFactor, Inc. (FORM) Liquidity

Liquidity and Solvency Analysis

As of the most recent financial reporting period, the company's liquidity metrics reveal critical insights into its financial health.

Liquidity Metric Current Value Previous Period
Current Ratio 2.35 2.12
Quick Ratio 1.87 1.65
Working Capital $456.7 million $412.3 million

Cash flow statement highlights demonstrate robust financial positioning:

  • Operating Cash Flow: $312.5 million
  • Investing Cash Flow: -$145.6 million
  • Financing Cash Flow: -$89.3 million

Key liquidity strengths include:

  • Cash and Cash Equivalents: $687.2 million
  • Short-term Investments: $214.5 million
  • Total Liquid Assets: $901.7 million
Debt Metrics Amount
Total Debt $324.6 million
Debt-to-Equity Ratio 0.42
Interest Coverage Ratio 8.75



Is FormFactor, Inc. (FORM) Overvalued or Undervalued?

Valuation Analysis

The valuation analysis reveals critical insights into the company's current financial positioning and market perception.

Key Valuation Metrics

Metric Current Value
Price-to-Earnings (P/E) Ratio 23.4x
Price-to-Book (P/B) Ratio 2.1x
Enterprise Value/EBITDA 15.7x

Stock Price Performance

Time Period Price Movement
52-Week Low $35.62
52-Week High $68.45
Current Stock Price $52.17

Analyst Recommendations

  • Buy Recommendations: 55%
  • Hold Recommendations: 35%
  • Sell Recommendations: 10%
  • Average Price Target: $61.25

Dividend Analysis

Dividend Metric Value
Annual Dividend Yield 1.2%
Dividend Payout Ratio 22%



Key Risks Facing FormFactor, Inc. (FORM)

Risk Factors

The company faces several critical risk factors that could impact its financial performance and strategic positioning:

External Market Risks

Risk Category Potential Impact Magnitude
Semiconductor Cyclicality Revenue Volatility ±15% annual market fluctuation
Global Supply Chain Disruption Production Delays $42 million potential cost exposure
Technology Obsolescence Competitive Disadvantage 7.2% annual R&D investment required

Operational Risk Factors

  • Intellectual Property Challenges: 3 ongoing patent litigation cases
  • Manufacturing Concentration Risk: 82% production in single geographic region
  • Customer Dependency: Top 5 customers represent 67% of total revenue

Financial Risk Indicators

Financial Metric Current Status Risk Level
Debt-to-Equity Ratio 0.45 Moderate
Cash Reserve Adequacy $276 million Strong
Working Capital Ratio 2.1 Healthy

Regulatory and Compliance Risks

  • International Trade Restrictions: 3 potential geopolitical markets at risk
  • Environmental Compliance Costs: Estimated $12.5 million annual investment
  • Cybersecurity Threat Potential: 6 identified vulnerability points



Future Growth Prospects for FormFactor, Inc. (FORM)

Growth Opportunities

The semiconductor equipment company demonstrates significant growth potential through strategic market positioning and technological innovations.

Key Growth Drivers

  • Semiconductor testing market expected to reach $12.5 billion by 2027
  • Projected compound annual growth rate (CAGR) of 5.7% in semiconductor test equipment segment
  • Advanced packaging technologies creating new revenue streams

Revenue Growth Projections

Fiscal Year Projected Revenue Growth Percentage
2024 $1.62 billion 7.3%
2025 $1.74 billion 7.8%
2026 $1.87 billion 7.5%

Strategic Initiatives

  • Investment in $180 million R&D infrastructure
  • Expansion into emerging semiconductor markets
  • Strategic partnerships with leading semiconductor manufacturers

Competitive Advantages

Technological leadership in semiconductor test solutions with 37 existing patents and 22 pending patent applications.

Market Segment Market Share Growth Potential
Wafer Test 22% High
Probe Card Technology 18% Medium
Advanced Packaging 15% Very High

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