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Semiconductor Manufacturing Stocks Q1 Teardown: FormFactor (NASDAQ:FORM) Vs The Rest


Adam Hejl /
2024/07/04 7:56 am EDT

Looking back on semiconductor manufacturing stocks' Q1 earnings, we examine this quarter's best and worst performers, 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. 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.

The 14 semiconductor manufacturing stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 1.3%. while next quarter's revenue guidance was in line with consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, but semiconductor manufacturing stocks have performed well, with the share prices up 15.8% on average since the previous 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.

FormFactor reported revenues of $168.7 million, flat year on year, topping analysts' expectations by 1.7%. It was a decent quarter for the company, with optimistic revenue guidance for the next quarter but a miss of analysts' EPS estimates.

“DRAM probe card demand continues to be robust, and as expected, first quarter DRAM revenue reached the peak levels we last experienced in 2021,” said Mike Slessor, CEO of FormFactor,

FormFactor Total Revenue

The stock is up 41.6% since the results and currently trades at $62.3.

Is now the time to buy FormFactor? Access our full analysis of the earnings results here, it's free.

Best Q1: Lam Research (NASDAQ:LRCX)

Founded in 1980 by David Lam, who pioneered semiconductor etching technology, Lam Research (NASDAQ:LCRX) is one of the leading providers of the wafer fabrication equipment used to make semiconductors.

Lam Research reported revenues of $3.79 billion, down 2% year on year, outperforming analysts' expectations by 1.7%. It was a strong quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts' EPS estimates.

Lam Research Total Revenue

The stock is up 22.3% since the results and currently trades at $1,081.5.

Is now the time to buy Lam Research? Access our full analysis of the earnings results here, it's free.

Slowest Q1: Kulicke and Soffa (NASDAQ:KLIC)

Headquartered in Singapore, Kulicke & Soffa (NASDAQ: KLIC) is a provider of production equipment and tools used to assemble semiconductor devices

Kulicke and Soffa reported revenues of $172.1 million, down 0.5% year on year, falling short of analysts' expectations by 1.2%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its operating margin.

The stock is up 11.2% since the results and currently trades at $49.24.

Read our full analysis of Kulicke and Soffa's results here.

IPG Photonics (NASDAQ:IPGP)

Both a designer and manufacturer of its products, IPG Photonics (NASDAQ:IPGP) is a provider of high-performance fiber lasers used for cutting, welding, and processing raw materials.

IPG Photonics reported revenues of $252 million, down 27.4% year on year, falling short of analysts' expectations by 0.7%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its operating margin.

IPG Photonics had the slowest revenue growth among its peers. The stock is down 4.5% since the results and currently trades at $84.58.

Read our full, actionable report on IPG Photonics here, it's free.

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.

Entegris reported revenues of $771 million, down 16.4% year on year, falling short of analysts' expectations by 0.1%. It was a mixed quarter for the company, with underwhelming revenue guidance for the next quarter and an increase in its inventory levels.

The stock is up 6.1% since the results and currently trades at $141.

Read our full, actionable report on Entegris here, it's free.

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