-+ 0.00%
-+ 0.00%
-+ 0.00%

A Look At FormFactor (FORM) Valuation After Earnings Beat And Strong AI Memory Testing Outlook

Simply Wall St·02/17/2026 10:25:47
Listen to the news

FormFactor (FORM) is back in focus after its fourth quarter earnings and above-consensus first quarter guidance highlighted operational changes, including workforce reductions and manufacturing yield improvements, alongside stronger demand in memory testing.

See our latest analysis for FormFactor.

The strong reaction to FormFactor’s latest earnings and guidance is showing up in the price action, with a 30 day share price return of 23.52% and a 90 day share price return of 98.71%, while the 1 year total shareholder return of 155.90% suggests momentum has been building rather than fading.

If you think the recent move in FormFactor highlights how quickly sentiment can shift around chips, it might be a good time to see 34 AI infrastructure stocks as another way to spot potential semiconductor related opportunities.

With FormFactor now trading above the average analyst price target and an intrinsic value estimate that sits well below the current share price, investors have to ask whether there is still a reasonable entry point here or if the market is already baking in a lot of future growth.

Most Popular Narrative: 42.5% Overvalued

FormFactor’s most followed narrative pegs fair value at $67.88 compared with the last close of $96.73, so you are looking at a sizeable valuation gap to unpack.

Strategic investments in new manufacturing capacity (Farmers Branch, Texas) and vertical integration via organic substrate partnerships aim to expand production, lower long-term operating costs, and leverage financial or regulatory incentives, enabling margin expansion and improved profitability as AI and advanced packaging demand intensifies. (Impacts: Gross margins, net margins)

Read the complete narrative.

Curious how a single facility ramp, rising margin assumptions and a richer future earnings multiple combine to justify that fair value gap? The full narrative lays out the revenue build, profitability targets and discounting math that underpin the $67.88 figure without assuming everything goes right.

Result: Fair Value of $67.88 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the narrative still hangs on some big execution questions, including whether margin pressure, higher operating costs and customer concentration shake confidence in those long term targets.

Find out about the key risks to this FormFactor narrative.

Next Steps

If this mix of optimism and concern around FormFactor has you thinking, it is worth moving quickly and weighing the full picture for yourself, starting with 1 key reward and 1 important warning sign.

Looking for more investment ideas?

If FormFactor has sharpened your interest in what is possible with the right setup, do not stop here; broaden your watchlist with a few focused screens.

  • Target income first and scan for companies that look like potential income anchors using our list of 13 dividend fortresses that could complement a growth heavy portfolio.
  • Hunt for quality at a reasonable price by reviewing 55 high quality undervalued stocks, which filters for companies that pair solid fundamentals with valuations that some investors may find appealing.
  • Prioritise resilience by checking 82 resilient stocks with low risk scores, where the focus is on businesses that score well on financial strength and may help steady your overall mix.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.