Wells Fargo Reiterates Hold Rating on FormFactor Due to Concerns Regarding Improving Margin

FormFactor, Inc. (NASDAQ:FORM) is one of the 12 Best Semiconductor Equipment Stocks to Buy Right Now. On August 21, Wells Fargo reiterated its Hold rating on FormFactor, Inc. (NASDAQ:FORM), without a price target on the stock.

Wells Fargo retains a hold rating on FORM following mixed Q2 FY2025 results. The company posted revenue of $195.8 million, exceeding the upper end of the estimates, but down 0.8% from a year ago. FormFactor anticipates Q3 revenue to be around $200 million plus/minus $5 million, in line with Wall Street estimates. The company is positioned well to enable innovations in advanced packaging and generative AI, which are gaining higher demand. FormFactor is also shipping in volume across all three major HBM manufacturers, diversifying its HBM demand portfolio.

Despite the company’s exciting results in Q2, CEO Mike Slessor acknowledged that recent financial results and especially gross margins have not reflected their unique market leadership position. Wells Fargo also retains the rating without a price target due to challenges faced in improving margins, mainly impacted by headwinds from tariffs and rising operational costs.

Since the Q2 earnings release on July 30, FormFactor shares have plunged over 17% as of August 29, while FormFactor, Inc.’s (NASDAQ:FORM) average price target of $32.50, based on analysts’ estimates, implies an upside of almost 11.34% from current levels.

FormFactor, Inc. (NASDAQ:FORM) offers key test and measurement technologies, including the full semiconductor product life cycle. The solutions range from characterization, modeling, reliability, and design debugging to qualification and product testing.

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