This is a step-by-step stock review to answer the question, is FormFactor (FORM) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is FormFactor (FORM) stock a good buy?
- FormFactor Company History
- MOS
- Meaning
- Moat
- Management
- 4M Score
- Is FormFactor (FORM) stock a good buy?
1. FormFactor Company History
When investing in stocks, it’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition.
- Founded in 1993: Established by Igor Khandros in Livermore, California.
- Specialization: Focuses on designing and manufacturing advanced semiconductor test and measurement equipment.
- Innovative Technology: Known for its advanced wafer probe cards, crucial for testing semiconductor wafers.
- IPO in 2003: Went public on NASDAQ under the ticker symbol FORM.
- Global Reach: Expanded operations worldwide, serving major semiconductor manufacturers in various countries.
- Acquisitions: Acquired several companies to enhance its technology portfolio and market position, including MicroProbe in 2012.
- Product Range: Offers a variety of products including probe cards, engineering probes, and thermal sub-systems.
- Commitment to R&D: Invests significantly in research and development to maintain technological leadership and innovation.
- Customer Base: Serves a broad range of customers, including leading chip manufacturers and fabless semiconductor companies.
- Sustainability and Quality: Emphasizes sustainable practices and high-quality standards in manufacturing and operations.
2. MOS (Margin Of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: Overpriced
- Score:39
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how FormFactor makes money:
- Sales of Probe Cards: FormFactor earns money by selling advanced wafer probe cards used in semiconductor testing.
- Engineering Probes: Generates revenue from engineering probes used for testing and development in semiconductor manufacturing.
- Thermal Subsystems: Provides thermal subsystems that manage heat during semiconductor testing, contributing to overall sales.
- Custom Solutions: Offers custom-designed probe solutions for specific customer needs, earning from tailored engineering and manufacturing.
- Service and Support: Profits from providing maintenance, calibration, and support services for its testing equipment.
- Long-Term Contracts: Secures revenue through long-term contracts with semiconductor manufacturers for ongoing supply and support.
- R&D Investments: Earns from innovations and patents developed through research and development efforts, enhancing its product offerings.
- International Sales: Expands its market reach by selling products and services to semiconductor companies worldwide.
- Technology Licensing: Gains income from licensing its technology and intellectual property to other companies in the semiconductor industry.
- Cascade Microtech
- MicroProbe
- Keithley Instruments (test and measurement business)
- Agilent Technologies’ semiconductor business
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how FormFactor stacks up against other companies.
- NVIDIA Corporation.(NVDA) – 100
- Monolithic Power Systems, Inc.(MPWR) – 78
- Aehr Test Systems.(AEHR) – 72
- Nova Ltd.(NVMI) – 72
- Axcelis Technologies, Inc.(ACLS) – 72
- FormFactor, Inc.(FORM) – 39
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Revenue Growth: Significantly increased company revenue through strategic initiatives and market expansion.
- Product Innovation: Led the development of advanced semiconductor test and measurement solutions, enhancing product portfolio.
- Operational Efficiency: Improved operational processes, reducing costs and increasing productivity.
- Market Leadership: Established FormFactor as a leader in the semiconductor test and measurement industry.
- Strategic Acquisitions: Successfully executed acquisitions to broaden product offerings and enter new markets.
- Customer Relationships: Strengthened customer relationships by delivering high-quality products and exceptional service.
- Sustainability Efforts: Implemented sustainable practices and promoted environmental responsibility within the company.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of FormFactor (FORM) is 71/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is FormFactor (FORM) stock a good buy?
Some of the top questions investors can have is FormFactor (FORM) stock a good buy or should I buy FormFactor (FORM) stock?
Investing in FormFactor is attractive due to its strong performance under Mike D. Slessor’s leadership. Slessor has driven significant revenue growth through strategic product innovations and expanding the company’s semiconductor test and measurement solutions. Operational improvements have led to increased efficiency and cost reductions, enhancing overall profitability. FormFactor’s leadership in the semiconductor industry and successful strategic acquisitions have broadened its market reach and product offerings. Additionally, the company’s focus on sustainability and environmental responsibility aligns with current industry trends and consumer expectations. However, potential investors should be aware of the cyclical nature of the semiconductor industry and potential market fluctuations that could impact performance. Despite these risks, FormFactor’s strong financial health, innovative advancements, and strategic initiatives position it as a promising investment opportunity, provided investors remain cautious of industry volatility and economic changes.
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To truly know if FormFactor is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
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