Yahoo Finance Why Is FormFactor (FORM) Up 10.1% Since Last Earnings Report?
It has been about a month since the last earnings report for FormFactor (FORM). Shares have added about 10.1% 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? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
FormFactor Q1 Earnings Lag Estimates, Revenues Rise
FormFactor delivered first-quarter 2024 adjusted earnings of 18 cents per share, missing the Zacks Consensus Estimate by 5.26%. The bottom-line figure increased 12.5% year over year.
Revenues of $168.7 million beat the Zacks Consensus Estimate by 2.24% and increased 0.8% on a year-over-year basis. The top-line growth can primarily be attributed to growth in probe cards.
Segments in Detail
Probe card revenues were $136.7 million, up 7.4% year over year.
Foundry & Logic (accounting for 51.5% of revenues) revenues were $86.8 million, down 14.6% year over year.
DRAM revenues (27.2% of revenues) were $45.9 million, up 131.8% year over year.
Flash revenues (2.4% of revenues) were $4 million, down 32.2% year over year.
Systems revenues (19% of revenues) were $32 million, down 20.2% year over year.
Regionally, revenues generated from the United States and South Korea increased 21.5% and 143.8% year over year, respectively.
Revenues generated from Taiwan, China, Europe, Japan, Malaysia, Singapore and the Rest of World were down 25.8%, 42.4%, 6.4%, 22.7%, 83.2%, 9.4% and 40%, respectively, year over year.
Operating Results
In first-quarter 2024, gross margin increased 30 basis points (bps) year over year to 38.7% in the reported quarter.
Non-GAAP operating expenses increased 2.3% year over year to $52.3 million. As a percentage of revenues, operating expenses were up 50 bps year over year to 31%.
The non-GAAP operating margin contracted 20 bps year over year to 7.7%.
Balance Sheet & Cash Flow
As of Mar 30, 2024, cash and cash equivalents and marketable securities were $349.2 million compared with $328.3 million on Dec 30, 2023.
Cash generated from operating activities was $33 million for the reported quarter, up from $9.25 million in the previous quarter.
Free cash flow was $19.7 million for the reported quarter.
Guidance
FormFactor expects first-quarter 2024 revenues of $195 million (+/- $5 million).
The company expects a non-GAAP gross margin of 45% (+/- 1.5%).
On a non-GAAP basis, FormFactor expects earnings of 31 cents (+/- 4 cents) per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 76.19% due to these changes.
VGM Scores
Currently, FormFactor has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the lowest 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. Notably, FormFactor has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
FormFactor belongs to the Zacks Electronics - Semiconductors industry. Another stock from the same industry, Advanced Micro Devices (AMD), has gained 14.1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Advanced Micro reported revenues of $5.47 billion in the last reported quarter, representing a year-over-year change of +2.2%. EPS of $0.62 for the same period compares with $0.60 a year ago.
For the current quarter, Advanced Micro is expected to post earnings of $0.67 per share, indicating a change of +15.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.3% over the last 30 days.
Advanced Micro has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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