FORM Should I Buy
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FormFactor Inc (FORM) is not a strong buy at the moment for a beginner investor with a long-term horizon and $50,000-$100,000 available for investment. While the company shows strong financial performance, positive analyst sentiment, and hedge fund buying activity, the recent price decline, insider selling, and lack of strong proprietary trading signals suggest waiting for a better entry point.
The technical indicators show mixed signals. The MACD is positive, indicating bullish momentum, and the moving averages are bullish (SMA_5 > SMA_20 > SMA_200). However, the RSI is in the neutral zone at 71.186, and the stock is trading near its resistance level (R1: 94.557), suggesting limited immediate upside potential. The stock has a 70% chance to decrease by 0.94% in the next day and a modest 2.09% increase in the next week.
Strong Q4 financial performance with revenue up 13.55% YoY, net income up 139.24% YoY, and EPS up 141.67% YoY.
Positive analyst sentiment with multiple price target increases and a 'beat and raise' quarter.
Hedge funds are significantly increasing their positions, with a 310.96% increase in buying over the last quarter.
Insider selling by Director Thomas St. Dennis, which may raise concerns about corporate governance.
The stock has already seen significant price appreciation (80% rise since Q3 2025), making the current valuation less attractive.
No recent proprietary trading signals (AI Stock Picker or SwingMax) to indicate a strong buy opportunity.
FormFactor reported strong Q4 2025 financials: Revenue increased to $215.16M (up 13.55% YoY), Net Income increased to $23.22M (up 139.24% YoY), EPS increased to $0.29 (up 141.67% YoY), and Gross Margin improved to 42.18% (up 8.63% YoY). These results highlight robust growth and operational improvements.
Analyst sentiment is broadly positive. Multiple firms raised their price targets following the Q4 earnings beat, with targets ranging from $70 to $100. Analysts highlight strong demand for DRAM probe cards, gross margin expansion, and long-term growth opportunities driven by AI and advanced chip technologies. However, some analysts express concerns about valuation and entry points given the stock's recent price surge.
