Investors need to just accept that FormFactor (FORM) is going to be a consistently inconsistent company. A lot of the company’s business is concentrated with a small number of customers, and those customers experience different testing needs from quarter to quarter (particularly with respect to leading-edge nodes/processes) that drives quite a bit of volatility. Over the longer term, though, FormFactor is positively tied to both increasing chip production volume and increasingly complex architectures, albeit with a mandate to keep pace on their end with R&D and engineering.
I thought FormFactor was expensive in mid-March, and the shares have since sold off almost 20%, lagging the SOX index by close to 30%. At this level I think FormFactor deserves another look. The predictably unpredictable nature of the business on a short-term basis is a definite turn-off for some, as is the risk of outsized quarterly stock price reactions, but longer term, I think this is a very reasonably-priced way to play increasing chip complexity.
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FormFactor Hit By Volatile Results, But Leading-Edge Launches Make It Worth A Look
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