In a report released today, Craig Ellis from B.Riley Financial downgraded Formfactor (FORM – Research Report) to a Hold, with a price target of $34.00.
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Craig Ellis’s rating is based on a combination of factors impacting FormFactor’s financial performance. The company’s recent quarterly results fell short of expectations, with a significant decline in demand for probe cards due to weak PC and smartphone markets, coupled with lower volumes leading to reduced gross margins. Additionally, the uncertainty surrounding the recovery of key customer INTC, along with the impact of U.S. BIS shipment restrictions affecting China probe card demand, presents significant challenges for revenue growth.
While there are potential revenue opportunities from AMD-related qualifications and the strength of HBM DRAM, these are not sufficient to offset the current headwinds. The anticipated decline in earnings and a lower-than-expected guidance for the upcoming quarter further contribute to the cautious outlook. Consequently, the price target has been significantly reduced, and the combination of these factors leads to a Hold rating, as the path to achieving target revenue and earnings levels remains unclear.
Ellis covers the Technology sector, focusing on stocks such as D-Wave Quantum, Rigetti Computing, and Axcelis Technologies. According to TipRanks, Ellis has an average return of 23.5% and a 53.52% success rate on recommended stocks.
In another report released today, TD Cowen also maintained a Hold rating on the stock with a $35.00 price target.