Bull Of The Day: FormFactor (FORM)
FormFactor (FORM - Free Report) is a Zacks Rank #1 (Strong Buy) and they are reporting earnings on February 5 after the close. I see Wall Street is looking for $174M on top and $0.31 in EPS. Let's take a look at why this stock is a Zacks Rank #1 (Strong Buy) and if this name is good to own before the print.
Description
FormFactor, Inc. designs, manufactures, and sells probe cards, analytical probes, probe stations, integrated measurement systems, and thermal sub-systems, as well as provides related services. It operates in two segments, Probe Cards and Systems.
FormFactor, Inc. markets and sells its products through direct sales force, manufacturers' representatives, and distributors in the United States, Taiwan, South Korea, China, Japan, Europe, the Asia-Pacific, and internationally. The company was founded in 1993 and is headquartered in Livermore, California.
Earnings History
I see a great history of beating the Zacks Consensus Estimate. In each of the last four quarters, FORM has topped the number by an average positive earnings surprise of 11%.
Consistently beating the number is something that investors love to see.
Estimates Move Higher
60 days ago, the Zacks Consensus Estimate for the current quarter was at $0.26, but that number has jumped to $0.32.
We have also seen the estimates for the full year and next year moving higher.
Valuation
At 24x forward earnings, the multiple is right in line with where the industry has been trading. A 3.2x price to book multiple is a little low, but that is good for value-oriented investors who like to see stocks at a P/B of less than 3x.
I see a slight move lower in margins lately, so if FORM can turn that around then this stock could be off to the races.
Chip Stocks
This earnings season has been a good one for chip stocks. This name is reporting on Wednesday, Feb 5 after the close. The chart looks solid and the recent pullback gives an even better reason to take a deeper look at being long this stock into the earnings report.
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