FORM · FormFactor
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $118.77
Note written ·
Price against the kill line
26.3% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $118.77, on record since 11 November 2026. The shares are down 36.6% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $118.77, over both the 50-day and 200-day moving averages, would show the shares leading again. Fourth-quarter revenue above the $295 million top of the guide would point the same way.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Technology
Quarter to 26 September 2026, filed 3 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 281
- Revenue, change on a year (%)
- +38.4
- Gross margin (%)
- 54.7
- Operating margin (%)
- 29.1
- Free cash flow, four quarters ($M)
- 181
- Net cash, cash less debt ($M)
- 384
- Price to earnings (×)
- 39.5
- Enterprise value to sales (×)
- 6.6
All filed numbers
What FormFactor reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 281 | +38.4 | 54.7 | 29.1 |
| first filed | 258 | +31.9 | 50.7 | 22.4 |
| first filed | 226 | +32.0 | 38.4 | 7.4 |
| first filed | 215 | +13.6 | 42.2 | 10.9 |
| first filed | 203 | −2.5 | 39.8 | 8.9 |
| first filed | 196 | −0.8 | 37.3 | 6.3 |
| Pre-tax income ($M) | 84.8 |
| Net income ($M) four quarters: 174 | 73.8 |
| Diluted shares, change on a year (%) against the quarter to 27 September 2025 | +2.2 |
| Operating cash flow ($M) | 257 |
| Capital spending ($M) | 75.8 |
| Free cash flow ($M) | 181 |
| Cash and short-term investments ($M) | 395 |
| Debt ($M) non-current long-term debt plus current maturities | 11.4 |
| Net cash, cash less debt ($M) | 384 |
| Deferred revenue ($M) +61.5% on a year | 37.3 |
| Backlog, orders not yet delivered ($M) −29.6% on a year | 13.3 |
| Receivables ($M) | 153 |
| Inventory ($M) | 130 |
| Shareholders' equity ($M) | 1,181 |
| Market value ($M) | 6,863 |
| Enterprise value, market value plus net debt ($M) | 6,479 |
| Enterprise value to sales (×) | 6.6 |
| Enterprise value to operating income (×) | 36.1 |
| Price to earnings (×) | 39.5 |
| Price to book value (×) | 5.8 |
| Free-cash-flow yield (%) | 2.6 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 3.3% of shares outstanding sold short, 1.0 days of average trading to cover, −19.9% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $3.4M |
| 12 monthsfrom | $0 | $23.4M |
The thesis
FormFactor's shares are more likely to lag the S&P 500 than lead it over the next three months. They closed at $95.78 on 11 November 2026, down 27.3% over three months and 40.2% below the 52-week high, even though the company beat third-quarter guidance and raised its fourth-quarter outlook on 28 October 2026. Fourth-quarter revenue against the $275–$295 million guide, due around 4 February 2027, decides whether results can lift the shares again.
The business is growing; the price action is the problem. The shares closed at $110.31 on 28 October 2026, fell 11.65% to $97.46 the next session, and closed at $85.24 on 4 November 2026. On 5 November 2026 they closed at $71.76. StockStory reported that chip stocks sold off that afternoon after incoming Democratic senators called for brakes on AI data-center development, with FormFactor among the largest decliners.
The shares then recovered to $85.63 on 10 November 2026 and $95.78 on 11 November 2026. News reports on 11 November 2026 listed a Jefferies initiation at Buy with a $102 target. The rebound leaves the shares under both the 50-day and 200-day moving averages.
The quality of the third quarter was mixed. About $8.6 million of non-recurring tariff refunds added roughly 300 basis points to gross margin and about $0.09 to earnings per share. High-bandwidth memory (HBM) probe-card revenue also fell in the quarter (28 October 2026 earnings call).
Bullish and bearish views on FormFactor, Inc.
The bull case on FormFactor, Inc. (FORM), in brief: revenue beat and the outlook rose. The bear case: HBM revenue went backwards.
Bull case
- Revenue beat and the outlook rose. Third-quarter revenue was $280.5 million, up 8.6% sequentially and 38.4% year over year, against a $270.5 million estimate. Non-GAAP earnings per share were $1.04 against $0.86 (Benzinga, 28 October 2026). The fourth-quarter revenue midpoint of $285 million sits above the $278.4 million estimate Benzinga cited.
- GPU probe cards have started shipping. On the 28 October 2026 call, management said FormFactor shipped probe cards for one GPU design to the world's leading foundry in multimillion-dollar volumes. Nvidia reports its third-quarter fiscal 2027 results on 17 November 2026.
- Optical test is growing faster than planned. Systems revenue reached $59.5 million in the third quarter, up 23% sequentially. Management expects its TRITON co-packaged optics test system to bring in more than $30 million in 2026 (28 October 2026 call).
- Teradyne is investing $300.0 million. Teradyne agreed on 6 October 2026 to buy 2,234,887 new FormFactor shares for about $300.0 million, with closing expected in fiscal fourth-quarter 2026 (Form 8-K).
- Some analysts still rate the shares a Buy. Freedom Capital Markets upgraded FormFactor to Buy with a $140 target on 2 November 2026. B. Riley kept a Buy on 9 November 2026 and Jefferies initiated at Buy with a $102 target on 11 November 2026.
Bear case
- HBM revenue went backwards. Management said on 28 October 2026 that third-quarter HBM probe-card revenue fell as customers shifted wafer starts to DDR5 on rising DDR prices. Total DRAM probe-card revenue was flat with the second quarter.
- Earnings step down in the fourth quarter. The guide calls for non-GAAP earnings per share of $0.86–$1.04 and GAAP earnings per share of $0.75–$0.93, against $1.04 and $0.93 in the third quarter (28 October 2026 release). Non-GAAP gross margin is guided to 54% ± 1.5 points, down from 56.5% once tariff refunds drop out.
- Targets are moving down. B. Riley cut its target to $125 from $150 on 9 November 2026. Jefferies' $102 target sits only 6.5% above the 11 November 2026 close.
- Share supply is growing. Teradyne filed on 10 November 2026 to resell up to 2.23 million FormFactor shares, a block close in size to the 2,234,887 shares it agreed to buy on 6 October 2026 (company news; Form 8-K).
- Insiders sold into strength. CEO Mike Slessor sold 11,098 shares at an average of $125.20 on 14 October 2026 under a Rule 10b5-1 plan, after sales of 17,510 shares at $104.73 on 16 September 2026 and 16,002 shares at $130.95 on 14 August 2026 (SEC Form 4).
Price setup
The shares closed at $95.78 on 11 November 2026, against a 52-week intraday high of $160.27 on 30 June 2026. The 50-day average is $113.1 and the 200-day average is $114.42 (adjusted daily closes as of 11 November 2026). The close is 15% below the 50-day average and 16% below the 200-day average.
The recent range runs from the $71.76 close on 5 November 2026 to the $110.31 close on 28 October 2026, the last close before the post-report drop. The 52-week closing low is $48.68 on 18 November 2025, so the shares remain well above where they traded a year ago.
SEC Form 4 filings dated 9 November 2026 show the CEO and CFO exercised options on 5 November to 6 November 2026, with shares withheld for tax at $71.76–$81.12. No open-market insider sale has been filed since the CEO's sale on 14 October 2026.
The market has priced in a sharp de-rating: the shares closed 27.3% lower than on 13 August 2026 despite a revenue beat, a higher outlook and a strategic investment from Teradyne.
Catalysts ahead
- 17 November 2026: Nvidia third-quarter fiscal 2027 results and conference call (Nvidia press release dated 28 October 2026). Data-center GPU volume at TSMC drives demand behind FormFactor's newly shipping GPU probe cards, and the call tests AI data-center spending.
- ~26 December 2026 (est.): Closing of the Teradyne private placement, expected in FormFactor's fiscal fourth quarter; Teradyne filed on 10 November 2026 to resell up to 2.23 million shares. Confirms the $300.0 million cash inflow and the 2,234,887 new shares, and shows how much supply Teradyne may sell.
- ~4 February 2027 (est.): FormFactor fourth-quarter 2026 results. Shows whether revenue lands inside the $275–$295 million guide and whether gross margin holds near 54% without tariff refunds.
What would change the view
A daily close above $118.77, over both the 50-day and 200-day moving averages, would show the shares leading again. Fourth-quarter revenue above the $295 million top of the guide would point the same way.
What it trades with
FormFactor trades with memory capital spending and AI chip sentiment. Memory probe cards tie it to wafer-start decisions at SK hynix, Micron and Samsung, and it competes with Technoprobe for HBM share. GPU probe-card demand links it to Nvidia and TSMC volumes. On 5 November 2026 FormFactor fell with Amkor, Teradyne, Himax and Penguin Solutions on the data-center policy comments reported by StockStory. FormFactor has been in the S&P MidCap 400 since 6 October 2026, so mid-cap index flows also move the shares.
The evidence, claim by claim (8)
- FormFactor reported third-quarter 2026 revenue of $280.5 million, up 8.6% sequentially and 38.4% year over year, with non-GAAP EPS of $1.04 and GAAP EPS of $0.93. FormFactor third-quarter 2026 earnings release (Form 8-K) · as of
- FormFactor guided fourth-quarter 2026 revenue to $275–$295 million, non-GAAP EPS to $0.86–$1.04, GAAP EPS to $0.75–$0.93 and non-GAAP gross margin to 54% ± 1.5 points. FormFactor third-quarter 2026 earnings release · as of
- Third-quarter non-GAAP gross margin of 56.5% included about $8.6 million of non-recurring tariff refunds, worth roughly 300 basis points and $0.09 of EPS. FormFactor Q3 2026 earnings call · as of
- Third-quarter HBM probe-card revenue fell as customers shifted wafer starts to DDR5; total DRAM probe-card revenue was flat with the second quarter. FormFactor Q3 2026 earnings call · as of
- FormFactor fell 15.5% in afternoon trading as chip stocks sold off after incoming Democratic senators called for brakes on AI data-center development. StockStory, 5 November 2026 · as of
- B. Riley cut its FormFactor price target to $125 from $150 and kept a Buy rating. Benzinga, B. Riley note · as of
- Jefferies initiated coverage of FormFactor with a Buy rating and a $102 price target. Benzinga, Jefferies note · as of
- CEO Mike Slessor sold 11,098 shares at an average $125.20 under a Rule 10b5-1 plan. SEC Form 4 filed 14 October 2026 · as of
Sources
- FormFactor, Amkor, Himax, Teradyne, and Penguin Solutions stocks trade down, what you need to know · stockstory.org ·
- NVIDIA Sets Conference Call for Third Quarter Financial Results · investor.nvidia.com
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