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"We rate FORMFACTOR INC (FORM) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 97.4% when compared to the same quarter one year prior, rising from -$10.71 million to -$0.28 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 18.9%. Since the same quarter one year prior, revenues slightly increased by 9.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- FORM has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.37, which clearly demonstrates the ability to cover short-term cash needs.
- Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 50.19% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FORM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- FORMFACTOR INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FORMFACTOR INC reported poor results of -$1.07 versus -$0.71 in the prior year. This year, the market expects an improvement in earnings ($0.28 versus -$1.07).
- You can view the full analysis from the report here: FORM Ratings Report