FormFactor (FORM) Stock Forecast & Price Target

FormFactor is benefiting from record 3Q26 results, with adjusted EPS of $1.04 on revenue of $281 million, while gross margin reached a record 54.7% and revenue rose more than 38% year over year, showing both operating leverage and strong demand. Its probe card leadership is being reinforced by rising needs for advanced packaging, HBM, AI-related logic and memory, and silicon photonics, while the on-schedule start-up of new Farmers Branch capacity should relieve production constraints and support future shipments. The bullish view is further supported by strategic collaborations and investments, including Teradyne’s $300 million stake and FormFactor’s own supply-chain investment, which underscore its strategic value and help sustain a multiyear upcycle in wafer-level test demand.

FormFactor is exposed to a cyclical semiconductor end market, heavy customer concentration, and limited pricing power, so a slowdown in economic activity or a delay in major customer node ramps could quickly pressure revenue and profitability. Its outlook is also burdened by technological obsolescence and margin noise: FY25 excess and obsolete inventory provisions were about $15 million versus $12 million in FY24, while record non-GAAP gross margin of 56.5% in C3Q included one-time benefits, with a cleaner 52.5% to 53.0% baseline and about $5 million of TX fab startup costs expected to weigh further into C1H27. In addition, China revenue fell to $58 million in FY25 from $103 million in FY24 and $92 million in FY23, and reliance on strategic M&A adds execution risk that could leave growth, returns, and competitiveness below expectations.