FormFactor (NASDAQ:FORM) Shares Gap Down – Should You Sell?

FormFactor, Inc. (NASDAQ:FORM)’s stock price gapped down prior to trading on Thursday. The stock had previously closed at $110.31, but opened at $101.80. FormFactor shares last traded at $100.5430, with a volume of 395,846 shares changing hands.

Key Headlines Impacting FormFactor

Here are the key news stories impacting FormFactor this week:

• Positive Sentiment: FormFactor reported record third-quarter revenue of $280.5 million, up 38.4% year over year and 8.6% sequentially. Adjusted EPS was $1.04, exceeding the $0.86 consensus estimate, while revenue also topped expectations. FormFactor Surpasses Q3 Earnings and Revenue Estimates
• Positive Sentiment: GAAP results also improved sharply: diluted EPS rose to $0.93 from $0.20 a year earlier, gross margin expanded to 54.7% from 39.8%, and operating cash flow increased to $104.3 million from $27.0 million. Growth was supported by Foundry & Logic, Systems, and co-packaged optics demand. FormFactor Reports 2026 Third Quarter Results
• Positive Sentiment: Management said broad-based demand remains strong and outlined a potential $400 million annual probe-card capacity exit rate by 2027 as its Farmers Branch facility ramps, supporting the longer-term semiconductor and AI-related growth outlook. FormFactor Outlines Probe Card Capacity Expansion
• Neutral Sentiment: FormFactor forecast fourth-quarter revenue of approximately $285 million, plus or minus $10 million. While this implies continued growth, investors may have expected a larger outlook increase after the third-quarter beat.
• Negative Sentiment: Fourth-quarter GAAP diluted EPS guidance of $0.84, plus or minus $0.09, is below the third quarter’s $0.93, potentially raising concerns about sequential earnings pressure despite solid revenue expectations.
• Negative Sentiment: The stock’s elevated valuation—about 69 times earnings—left little room for disappointment, and the shares fell after hours despite the strong results. Reports also noted substantial insider selling, including sales by CEO Mike Slessor, which may have added to investor caution.

Wall Street Analyst Weigh In

Several equities analysts recently issued reports on the stock. Zacks Research cut shares of FormFactor from a “strong-buy” rating to a “hold” rating in a research note on Monday, October 19th. TD Cowen cut their price objective on shares of FormFactor from $150.00 to $100.00 and set a “hold” rating for the company in a report on Thursday, July 30th. Wall Street Zen lowered shares of FormFactor from a “strong-buy” rating to a “buy” rating in a research note on Sunday, August 9th. Deutsche Bank Aktiengesellschaft initiated coverage on FormFactor in a report on Wednesday, September 30th. They issued a “buy” rating and a $200.00 price target for the company. Finally, Cantor Fitzgerald reiterated an “overweight” rating on shares of FormFactor in a research report on Tuesday, September 22nd. Seven analysts have rated the stock with a Buy rating and five have issued a Hold rating to the stock. Based on data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $131.83.

FormFactor Stock Performance

The company has a current ratio of 4.08, a quick ratio of 3.34 and a debt-to-equity ratio of 0.01. The stock has a market cap of $7.91 billion, a price-to-earnings ratio of 69.35 and a beta of 1.18. The firm’s 50-day moving average is $117.16 and its two-hundred day moving average is $113.21.

FormFactor (NASDAQ:FORM) last announced its earnings results on Wednesday, October 28th. The semiconductor company reported $1.04 EPS for the quarter, beating analysts’ consensus estimates of $0.86 by $0.18. The business had revenue of $280.55 million during the quarter, compared to analysts’ expectations of $270.52 million. FormFactor had a return on equity of 13.44% and a net margin of 12.80%. The business’s revenue was up 38.4% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $0.33 earnings per share. As a group, sell-side analysts expect that FormFactor, Inc. will post 2.70 earnings per share for the current year.

Insiders Place Their Bets

In other news, CEO Mike Slessor sold 11,098 shares of the stock in a transaction dated Wednesday, October 14th. The shares were sold at an average price of $125.20, for a total value of $1,389,469.60. Following the completion of the sale, the chief executive officer directly owned 455,596 shares in the company, valued at $57,040,619.20. This represents a 2.38% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Kelley Steven-Waiss sold 2,100 shares of the firm’s stock in a transaction dated Thursday, September 3rd. The stock was sold at an average price of $96.10, for a total transaction of $201,810.00. Following the completion of the transaction, the director directly owned 24,426 shares in the company, valued at approximately $2,347,338.60. This represents a 7.92% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold 46,710 shares of company stock valued at $5,520,564 in the last ninety days. Insiders own 0.79% of the company’s stock.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently made changes to their positions in FORM. Keating Financial Advisory Services Inc. acquired a new position in shares of FormFactor in the second quarter worth $25,000. V Square Quantitative Management LLC raised its stake in shares of FormFactor by 96.1% in the third quarter. V Square Quantitative Management LLC now owns 253 shares of the semiconductor company’s stock valued at $38,000 after acquiring an additional 124 shares in the last quarter. Persistent Asset Partners Ltd purchased a new position in FormFactor in the second quarter valued at $43,000. Mather Group LLC. acquired a new position in FormFactor during the 3rd quarter worth $44,000. Finally, Root Financial Partners LLC acquired a new position in FormFactor during the 3rd quarter worth $58,000. 98.76% of the stock is currently owned by institutional investors and hedge funds.

About FormFactor

FormFactor, Inc is a semiconductor test and measurement company that designs and manufactures equipment and components used to evaluate integrated circuits during the wafer fabrication and production process. Its products help semiconductor manufacturers and suppliers measure electrical performance, identify defects and improve the development and manufacturing of advanced chips.

The company’s portfolio includes probe cards used for wafer-level testing, as well as probe stations, analytical systems and related accessories for semiconductor engineering and production applications.