Why Is FormFactor (FORM) Down 4.2% Since Last Earnings Report?

It has been about a month since the last earnings report for FormFactor (FORM). Shares have lost about 4.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is FormFactor due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for FormFactor, Inc. before we dive into how investors and analysts have reacted as of late.

FORM Q1 Earnings Beat Estimates, Revenues Rise Y/Y, Margin Jumps

FormFactor delivered first-quarter fiscal 2026 non-GAAP earnings of56 cents per share, which increased 143.5% year over year and beat the Zacks Consensus Estimate by 24.4%.

Revenues were $226.1 million, up 32% year over year, and beat the consensus mark by 0.23%. Results reflected a strong demand backdrop, highlighted by record DRAM revenues (36.7% of the total revenues) of $82.9 million, up 69.5% year over year, supported by higher HBM-related activity and sustained non-HBM demand.

FORM’s Segmental Revenue Details

FORM’s top line continued to be driven by Probe Cards, which generated $198.2 million in the quarter, up 45% year over year. The strength underscored broad-based demand across memory and logic test applications, keeping the company’s core consumables franchise in a favorable position as customers push for higher test intensity.

Within Probe Cards, Foundry & Logic revenues (49.2% of the total revenues) rose to $111.2 million, up 30.4% year over year, reflecting growth in probe cards tied to networking applications. Flash revenues (1.8% of the total revenues) were $4.1 million, up 70.8% year over year, while the overall probe card mix continued to benefit from advanced packaging-related testing requirements. Systems revenues (12.3% of the total revenues) were $27.9 million, down 19.8% year over year. 

FormFactor’s revenue mix remained heavily weighted toward Asia, led by South Korea at $80.6 million (35.6% of total revenues) and Taiwan at $70.8 million (31.3% of total revenues). The United States generated $29.4 million (13% of total revenues), while China contributed $11.4 million (5% of total revenues), highlighting a geographic profile closely aligned with leading-edge semiconductor production and memory manufacturing hubs.

Customer concentration also stood out. SK Hynix accounted for 29.5% of total revenues in the quarter, and NVIDIA represented 10.2%. The concentration reflects FORM’s exposure to large, high-volume customers that are actively investing in advanced memory and compute platforms.

FORM’s Operating Results

FORM’s non-GAAP gross margin climbed to 49%, improving 980 basis points (bps) year over year and 510 bps sequentially. The outperformance supported management’s view that the quarter exceeded the company’s target model on a quarterly run-rate basis, helped by a favorable demand environment and improved profitability.

FormFactor continued to invest in product development while maintaining discipline in its operating cost structure. Non-GAAP research and development expense was $27 million, down 2.8% year over year, while selling, general and administrative expense totaled $27.9 million, down 16.5% year over year.

Total non-GAAP operating expenses were $62 million, up 23.4% year over year, while non-GAAP operating income was $48.7 million, up 188.3% year over year, reflecting the company’s stronger underlying operating performance after adjustments.

FormFactor’s Balance Sheet & Cash Flow

As of March 28, 2026, cash and cash equivalents and marketable securities were $303.2 million compared with $275.1 million as of Dec. 27, 2025.

Cash generated from operating activities was $45 million in the reported quarter, slightly down from $46 million in the previous quarter. Free cash flow was $30.7 million.

FORM Offers Optimistic Q2 Guidance

FormFactor’s outlook called for continued momentum into the second quarter of fiscal 2026. The company guided revenues to $240 million (plus or minus $5 million), with non-GAAP gross margin expected at 49.5% (plus or minus 1.5%), and non-GAAP earnings projected at 61 cents (plus or minus 4 cents) per share.

Management noted that the outlook reflects strong DRAM demand driven by HBM, alongside continued growth in Foundry & Logic probe-card revenues, supported by incremental strength in data-center CPU applications. The outlook assumes consistent foreign currency rates, setting a constructive tone for sequential progress.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates revision.

The consensus estimate has shifted 54.54% due to these changes.

VGM Scores

At this time, FormFactor has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock has a score of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise FormFactor has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

FormFactor is part of the Zacks Electronics - Semiconductors industry. Over the past month, Amkor Technology (AMKR), a stock from the same industry, has gained 1.2%. The company reported its results for the quarter ended March 2026 more than a month ago.

Amkor Technology reported revenues of $1.68 billion in the last reported quarter, representing a year-over-year change of +27.5%. EPS of $0.33 for the same period compares with $0.09 a year ago.

For the current quarter, Amkor Technology is expected to post earnings of $0.47 per share, indicating a change of +113.6% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Amkor Technology. Also, the stock has a VGM Score of A.

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This article originally published on Zacks Investment Research (zacks.com).

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