FormFactor (FORM) Expands Probe Card Footprint, Craig-Hallum Stays Positive

FormFactor Inc. (NASDAQ:FORM) is one of the most oversold semiconductor stocks so far in 2025. The company has a strong foundation, with $764 million in revenue and $83 million in free cash flow in FY 2024. In the next few years, it aims to grow revenue to $850 million and expand margins through operating leverage, targeting $2.00 in adjusted EPS.

FormFactor is poised to benefit from several powerful secular trends, including the exponential growth in semiconductor content driven by AI, 5G, data center expansion, and advanced packaging, as well as the slowdown of Moore’s Law. It expects the revenue contribution from the Engineering Systems business to increase to 24% from 18% currently, through above-market growth. Meanwhile, the Probe Cards revenue contribution is expected to settle at around 75% in the next few years, down from 82%.

FormFactor (FORM) Expands Probe Card Footprint, Craig-Hallum Stays Positive

A robotic arm placing a semiconductor chip on a test contactor.

The company is also actively expanding its manufacturing footprint. In early June, it purchased a manufacturing site in Farmers Branch, Texas, for $55 million, giving it 50,000 square feet of clean room space. On the purchase, Mike Slessor, CEO of FormFactor, stated:

“As we’ve said for some time, we are seeing increased test intensity driven by the adoption of advanced packaging technologies, which is in turn driving increased demand for FormFactor’s probe-card products. This is evident in the recent rapid growth of our High Bandwidth Memory, or HBM, probe-card revenue, and we expect this advanced-packaging driven growth to continue. The purchase of this facility, for a competitive price, creates optionality for us in cost-effectively meeting this anticipated increasing long-term demand, and it will be an important step forward as we refine our operational strategy.”

Christian Schwab from Craig-Hallum continued to hold an optimistic view on the shares, maintaining his Buy rating (without assigning a price target) in a note published on June 26.

FormFactor Inc. (NASDAQ:FORM) is a provider of essential test and measurement technologies throughout the entire semiconductor product life cycle.

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Disclosure: None. This article is originally published at Insider Monkey.