Cypress Semiconductor (NASDAQ:CY) and FormFactor (NASDAQ:FORM) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Profitability

This table compares Cypress Semiconductor and FormFactor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cypress Semiconductor 2.08% 21.26% 11.11%
FormFactor 4.71% 11.42% 8.35%

Risk and Volatility

Cypress Semiconductor has a beta of 2.11, indicating that its stock price is 111% more volatile than the S&P 500. Comparatively, FormFactor has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500.

Institutional and Insider Ownership

83.5% of Cypress Semiconductor shares are held by institutional investors. Comparatively, 95.9% of FormFactor shares are held by institutional investors. 0.4% of Cypress Semiconductor shares are held by insiders. Comparatively, 1.3% of FormFactor shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Cypress Semiconductor pays an annual dividend of $0.44 per share and has a dividend yield of 3.4%. FormFactor does not pay a dividend. Cypress Semiconductor pays out 73.3% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current recommendations for Cypress Semiconductor and FormFactor, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cypress Semiconductor 1 2 9 0 2.67
FormFactor 0 2 3 0 2.60

Cypress Semiconductor currently has a consensus target price of $18.21, suggesting a potential upside of 40.60%. FormFactor has a consensus target price of $17.38, suggesting a potential upside of 16.22%. Given Cypress Semiconductor’s stronger consensus rating and higher possible upside, equities analysts plainly believe Cypress Semiconductor is more favorable than FormFactor.

Valuation and Earnings

This table compares Cypress Semiconductor and FormFactor’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cypress Semiconductor $2.33 billion 2.01 -$80.91 million $0.60 21.58
FormFactor $548.44 million 2.02 $40.91 million $1.00 14.95

FormFactor has lower revenue, but higher earnings than Cypress Semiconductor. FormFactor is trading at a lower price-to-earnings ratio than Cypress Semiconductor, indicating that it is currently the more affordable of the two stocks.

Summary

Cypress Semiconductor beats FormFactor on 9 of the 16 factors compared between the two stocks.

About Cypress Semiconductor

Cypress Semiconductor Corporation designs, develops, manufactures, markets, and sells embedded system solutions worldwide. It operates in two segments, Microcontroller and Connectivity Division, and Memory Products Division. The Microcontroller and Connectivity Division provides microcontroller (MCU), analog, and wireless and wired connectivity solutions, including Traveo automotive MCUs; programmable system-on-chip and general-purpose MCUs; ARM Cortex-M4, -M3, and -M0+ MCUs; R4 CPUs; analog power management integrated circuits and energy harvesting solutions; CapSense capacitive-sensing controllers; TrueTouch touchscreens; Wi-Fi, Bluetooth, Bluetooth low energy, and ZigBee solutions; WICED development platform; and USB controllers comprising solutions for the USB-C and USB power delivery standards, as well as wireless Internet of things connectivity solutions. The Memory Products Division provides NOR and NAND flash memories, static random access memory (SRAM) products, HyperRAm, synchronous and asynchronous SRAMs, nvSRAMs, F-RAM ferroelectric memory devices, and other specialty memories and timing solutions. The company serves various markets, including automotive, industrial, consumer, computation, white goods, communications, handset, PC peripherals, mobile devices, networking, telecommunications, video, data communications, computation, and medical markets. Cypress Semiconductor Corporation sells its semiconductor products through distributors and manufacturing representative firms, as well as through sales force directly to original equipment manufacturers and their suppliers. The company was founded in 1982 and is headquartered in San Jose, California.

About FormFactor

FormFactor, Inc. designs, manufactures, and sells probe cards, analytical probes, probe stations, integrated measurement systems, thermal sub-systems, and reliability test systems. The company offers probe cards that are used to test various semiconductor device types, including system on a chip products, mobile application processors, microprocessors, microcontrollers, and graphic processors, as well as radio frequency, analog, mixed signal, image sensor, electro-optical, dynamic random access memory, NAND flash memory, and NOR flash memory devices; and analytical probes, which are used for a range of applications, including device characterization, electrical simulation model development, failure analysis, and prototype design debugging for universities, research institutions, semiconductor integrated device manufacturers, semiconductor foundries, and fabless semiconductor companies. It also provides probing systems for semiconductor design engineers to capture and analyze accurate data; integrated measurement systems that include test instrumentation, probe, cabling configurations, and software to enable fast, accurate, and on-wafer data collection for complex application and measurement needs; thermal subsystems that produce thermal chucks and other test systems used in probe stations. In addition, the company offers on-site probe card maintenance and service training, seminars, and telephone support services. FormFactor, Inc markets and sells its products through direct sales force, manufacturers' representatives, and distributors in the United States, South Korea, Taiwan, Japan, and rest of the Asia-Pacific, as well as in Europe and internationally. The company was founded in 1993 and is headquartered in Livermore, California.

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