FormFactor (FORM) Stock Forecast & Price Target

FormFactor Inc. is experiencing a positive outlook driven by increased demand for its probe cards, particularly in the Foundry/Logic and DRAM markets, which are expected to contribute to significant revenue growth in the coming years. The company has demonstrated strong financial performance, with a solid beat-and-raise quarter reflecting improved customer innovation and investment, leading to higher test intensity and complexity. Furthermore, FormFactor's customer diversification strategy, coupled with cycle and yield improvements, supports a revenue guidance of $225 million and positions the company for continued growth into CY26.

FormFactor Inc. is facing persistent challenges in revenue growth and gross margins, with management indicating weak market conditions and a significant decline in revenue contribution from China, dropping from the low 20% range to approximately mid-single digits. The company has experienced gross margins of around 39% in the first half of 2025, substantially below its targeted model of 47%, compounded by headwinds such as tariffs and unexpected ramp-up costs that could further pressurize margins. Without improvements in these financial metrics and in the overall semiconductor market sentiment, FormFactor’s stock remains at risk of further decline.