Contrasting FormFactor (FORM) and Photronics (PLAB)

FormFactor (NASDAQ: FORM) and Photronics (NASDAQ:PLAB) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, risk, dividends, earnings and valuation.

Valuation & Earnings

This table compares FormFactor and Photronics’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FormFactor $383.88 million 2.97 -$6.55 million $0.26 60.00
Photronics $450.68 million 1.40 $13.13 million $0.20 45.60

Photronics has higher revenue and earnings than FormFactor. Photronics is trading at a lower price-to-earnings ratio than FormFactor, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

FormFactor has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500. Comparatively, Photronics has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for FormFactor and Photronics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FormFactor 0 1 5 0 2.83
Photronics 0 0 1 0 3.00

FormFactor currently has a consensus price target of $18.40, indicating a potential upside of 17.95%. Photronics has a consensus price target of $13.00, indicating a potential upside of 42.54%. Given Photronics’ stronger consensus rating and higher probable upside, analysts clearly believe Photronics is more favorable than FormFactor.

Insider & Institutional Ownership

84.4% of FormFactor shares are held by institutional investors. Comparatively, 94.7% of Photronics shares are held by institutional investors. 2.3% of FormFactor shares are held by company insiders. Comparatively, 3.7% of Photronics shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares FormFactor and Photronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FormFactor 3.68% 16.80% 11.20%
Photronics 2.91% 1.55% 1.30%

FormFactor Company Profile

FormFactor, Inc. is a provider of test and measurement solutions. The Company’s segments include the Probe Cards segment and Systems segment. The Company designs, manufactures and sells multiple product lines, including probe cards, analytical probes, probe stations, integrated measurement systems, thermal sub-systems, reliability test systems, and related services. Its products provide electrical information from a range of semiconductor and electro-optical devices and integrated circuits (devices) from development to production. Probe Cards segment consists of probe card products and analytical probes. Systems segment consists of wafer probing, thermal and reliability products to enable precision on-wafer measurement of integrated circuits. Systems products are used in the early phases of the development and characterization of semiconductor processes.

Photronics Company Profile

Photronics, Inc. is a manufacturer of photomasks, which are photographic quartz plates containing microscopic images of electronic circuits. As of October 30, 2016, the Company operated principally from nine manufacturing facilities: two located in Europe, three in Taiwan, one in Korea and three in the United States. Photomasks are used in the manufacture of semiconductors and flat panel displays (FPDs), and are used as masters to transfer circuit patterns onto semiconductor wafers and flat panel substrates during the fabrication of integrated circuits (ICs), and a range of FPDs and other types of electrical and optical components. The Company offers reticle and photomask maintenance, including pellicle replacement, mask cleaning and re-certification, at all its sites across the world. Its products include Mature Binary, Advanced Binary Reticles, Phase Shift Masks-Embedded Attenuated Phase Shift Masks (EAPSM), Other Advanced Products and Large Area Masks.

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