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Q3 Earnings Highlights: FormFactor (NASDAQ:FORM) Compared to Other Semiconductor Manufacturing Stocks

  • Stock
  • February 19, 2025

Q3 Earnings Highlights: FormFactor (NASDAQ:FORM) Vs The Rest Of The Semiconductor Manufacturing Stocks

Introduction

As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the semiconductor manufacturing industry, including FormFactor (NASDAQ:FORM) and its peers. The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers, and data storage. The need for technologies like artificial intelligence, 5G networks, and smart cars is also creating the next wave of growth for the industry.

Semiconductor Industry Overview

The semiconductor industry is a critical component of the global economy, driving innovation and advancement in various fields. Keeping up with this dynamism requires new tools that can design, fabricate, and test chips at ever smaller sizes and more complex architectures, creating a dire need for semiconductor capital manufacturing equipment.

Q3 Earnings Performance

The 14 semiconductor manufacturing stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was 1.3% below.

Market Reaction

In light of this news, share prices of the companies have held steady as they are up 4.8% on average since the latest earnings results.

FormFactor (NASDAQ:FORM)

With customers across the foundry and fabless markets, FormFactor (NASDAQ:FORM) is a US-based provider of test and measurement technologies for semiconductors.

  • Revenue Growth: FormFactor reported revenues of $207.9 million, up 21.2% year on year. This print exceeded analysts’ expectations by 3.8%.
  • Inventory Levels: Overall, it was a very strong quarter for the company with a significant improvement in its inventory levels and an impressive beat of analysts’ EPS estimates.
  • CEO Quote: ‘We are proud to have posted our all-time revenue record in the third quarter,’ said Mike Slessor, CEO of FormFactor.

Best Q3: Marvell Technology (NASDAQ:MRVL)

Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.

  • Revenue Growth: Marvell Technology reported revenues of $1.52 billion, up 6.9% year on year, outperforming analysts’ expectations by 4%.
  • Inventory Levels: The business had an exceptional quarter with a significant improvement in its inventory levels and revenue guidance for next quarter exceeding analysts’ expectations.
  • Market Reaction: The market seems happy with the results as the stock is up 24.4% since reporting.

Weakest Q3: Entegris (NASDAQ:ENTG)

With fabs representing the company’s largest customer type, Entegris (NASDAQ:ENTG) supplies products that purify, protect, and generally ensure the integrity of raw materials needed for advanced semiconductor manufacturing.

  • Revenue Decline: Entegris reported revenues of $807.8 million, down 9% year on year.
  • EPS Estimates: The company missed analysts’ EPS estimates by a wide margin.
  • Market Reaction: The stock is down 26.4% since reporting.

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs.

Investing in Winners with Rock-Solid Fundamentals

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