FormFactor (NASDAQ: FORM) and Lam Research Corporation (NASDAQ:LRCX) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.
Valuation and Earnings
This table compares FormFactor and Lam Research Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|FormFactor||$519.99 million||2.16||$61.41 million||($0.11)||-140.91|
|Lam Research Corporation||$8.01 billion||3.48||$2.22 billion||$9.20||18.66|
Lam Research Corporation has higher revenue and earnings than FormFactor. FormFactor is trading at a lower price-to-earnings ratio than Lam Research Corporation, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
FormFactor has a beta of 1.63, meaning that its share price is 63% more volatile than the S&P 500. Comparatively, Lam Research Corporation has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500.
Institutional & Insider Ownership
87.4% of FormFactor shares are held by institutional investors. Comparatively, 94.1% of Lam Research Corporation shares are held by institutional investors. 2.8% of FormFactor shares are held by company insiders. Comparatively, 0.5% of Lam Research Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares FormFactor and Lam Research Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Lam Research Corporation||21.19%||26.78%||14.96%|
This is a breakdown of recent ratings and recommmendations for FormFactor and Lam Research Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Lam Research Corporation||0||3||17||0||2.85|
FormFactor currently has a consensus target price of $17.14, indicating a potential upside of 10.60%. Lam Research Corporation has a consensus target price of $177.56, indicating a potential upside of 3.43%. Given FormFactor’s stronger consensus rating and higher probable upside, analysts clearly believe FormFactor is more favorable than Lam Research Corporation.
Lam Research Corporation pays an annual dividend of $1.80 per share and has a dividend yield of 1.0%. FormFactor does not pay a dividend. Lam Research Corporation pays out 19.6% of its earnings in the form of a dividend.
Lam Research Corporation beats FormFactor on 10 of the 16 factors compared between the two stocks.
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.
Lam Research Corporation Company Profile
Lam Research Corporation is a supplier of wafer fabrication equipment and services to the semiconductor industry. The Company designs, manufactures, markets, refurbishes and services semiconductor processing systems that are used in the fabrication of integrated circuits (ICs). It operates through manufacturing and servicing of wafer processing semiconductor manufacturing equipment segment. Its products are designed to enable its customers build a range of devices that are used in a range of electronic products, including cell phones, tablets, computers, storage devices, and networking equipment. Its customer base includes semiconductor memory, foundry, and integrated device manufacturers (IDMs) that make products, such as dynamic random-access memory (DRAM), negative-AND (NAND) memory and logic devices. It offers a portfolio of products that are used in several areas of the semiconductor manufacturing process flow, including thin film deposition, plasma etch and single-wafer clean.
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