FormFactor (FORM) Up 4% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for FormFactor (FORM). Shares have added about 4% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is FormFactor due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for FormFactor, Inc. before we dive into how investors and analysts have reacted as of late.FORM Q2 Earnings Miss Estimates, Revenues Up Y/YFormFactor reported second-quarter 2025 non-GAAP earnings of 27 cents per share, surpassing the Zacks Consensus Estimate by 10%. The bottom line decreased 23% year over year.Revenues of $195.8 million beat the Zacks Consensus Estimate by 2.87% but decreased 0.9% year over year.FormFactor’s Segmental Revenue DetailsProbe card revenues (82.8% of total revenues) were $162.1 million, down 2.8% year over year. Foundry and Logic revenues (50.8% of total revenues) were $99.5 million, down 4.1% year over year. DRAM revenues (29.2% of total revenues) were $57.1 million, down 1.6% year over year.  Flash revenues (2.8% of total revenues) were $5.5 million up 7.8% year over year. Systems revenues (17.3% of the total revenues) were $33.7 million, up 9.8% year over year.Revenues generated from Taiwan, Japan, South Korea and Singapore increased 18.1%, 93.4%, 16.3% and 48.9%, year over year, respectively.However, revenues from the United States, China, Europe and the rest of the world declined 14.6%, 62.5%, 18.2%, and 45.2%, year over year, respectively.FORM’s Operating ResultsIn the second quarter of 2025, the gross margin contracted 680 basis points (bps) year over year to 38.5%.Non-GAAP operating expenses decreased 13.8% year over year to $52.5 million. As a percentage of revenues, operating expenses moved down 400 bps year over year to 26.8%.The non-GAAP operating margin contracted 280 bps year over year to 11.7%.FormFactor’s Balance Sheet & Cash FlowAs of June 28, 2025, cash and cash equivalents, and marketable securities were $249.3 million compared with $299 million as of March 29, 2025.Cash generated from operating activities was $18.9 million in the reported quarter, down from $23.5 million in the previous quarter. Free cash flow was negative $47.1 million.FORM Offers Q3 GuidanceFORM expects third-quarter 2025 revenues of $200 million (+/- $5 million). The company expects a non-GAAP gross margin of 40% (+/- 1.5%). On a non-GAAP basis, FORM expects earnings of 25 cents (+/- 4 cents) per share.How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a downward trend in estimates review.The consensus estimate has shifted -26.95% due to these changes.VGM ScoresAt this time, FormFactor has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock has a score of C on the value side, putting it in the middle 20% 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.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise FormFactor has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report FormFactor, Inc. (FORM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks