FormFactor (FORM) has opened 2026 with Q1 revenue of US$226.1 million and basic EPS of US$0.26, alongside trailing 12 month revenue of US$839.8 million and basic EPS of US$0.88 that reflect the latest reported earnings base. The company has seen quarterly revenue move from US$171.4 million in Q1 2025 to US$226.1 million in Q1 2026, with basic EPS shifting from US$0.08 to US$0.26 over the same period, setting up a results season in which investors can weigh that earnings profile against the broader growth story, particularly in light of an 8.1% trailing net margin that points to profitability holding its ground.

See our full analysis for FormFactor.

With the headline numbers on the table, the next step is to compare these results with the widely held narratives around FormFactor's growth potential, risk profile and earnings quality to see which storylines hold up and which look overstretched.

Trailing Net Margin Holds At 8.1%

• Over the last 12 months FormFactor generated US$839.8 million in revenue and US$68.3 million in net income (excluding extra items), which works out to an 8.1% net margin compared with 7.1% a year earlier in the data.
• What stands out for the bullish narrative is that this 8.1% margin sits alongside trailing earnings growth of 25.6% and forecast earnings growth of about 52.4% a year, so:
  • Supporters of the bullish view point to the margin improvement as evidence that higher test complexity in areas like HBM and advanced packaging is already feeding through into profitability.
  • At the same time, the presence of a US$29.0 million one off loss in the last 12 months means bulls can argue that underlying earnings power could look stronger than the reported 8.1% margin once that item is stripped out.

On top of that earnings and margin backdrop, bullish investors are asking whether today is just the early innings of FormFactor's HBM and AI test story, or already pricing in most of the upside. The full bull case breaks that down in detail 🐂 FormFactor Bull Case.

Revenue Trend Versus Bearish Caution

• Quarterly revenue has moved from US$171.4 million in Q1 2025 to US$226.1 million in Q1 2026, while trailing 12 month revenue sits at US$839.8 million compared with US$766.2 million a year earlier in the data and is paired with forecast revenue growth of about 15.7% a year.
• Bears focus on mix and cyclicality, and this revenue profile gives them and you a few things to weigh:
  • Bears highlight the risk that a heavier tilt toward lower margin DRAM and volatile HBM ramps could keep gross margin and net income under pressure even if revenue, like this, continues to rise.
  • They also point to heavy capital spending and tariff related costs in the narrative, arguing that higher reported revenue and a 25.6% earnings lift over the last year might not fully compensate if those headwinds persist for several years.

Skeptical investors are using this revenue run rate and the capital spending plans as a reality check on the cautious thesis, and you can see how that argument is built out in the full bear case 🐻 FormFactor Bear Case.

Rich Valuation Versus DCF Fair Value

• FormFactor trades on a P/S of 13.8x, compared with 8.3x for the US Semiconductor industry, and a DCF fair value of US$41.61 is well below the current share price of US$149.12 in the data.
• Consensus narrative supporters and critics both have clear talking points from these figures:
  • On one side, the combination of 15.7% forecast revenue growth, 52.4% forecast earnings growth and an 8.1% trailing net margin helps explain why the market currently accepts a higher multiple than the sector.
  • On the other, the gap between US$149.12 and the DCF fair value of US$41.61, together with a P/S above the wider industry, is exactly what cautious investors reference when they question how much of that growth is already built into the price.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for FormFactor on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

The balance of risks and rewards in this story is unlikely to remain static for long. Check the figures yourself and decide where you stand, then round out your view with 2 key rewards and 2 important warning signs

See What Else Is Out There

The combination of an 8.1% net margin, tariff and capital spending headwinds, and a share price well above DCF fair value leaves the stock looking vulnerable.

If that rich pricing worries you and you would rather start with companies where valuation appears more forgiving, use the 45 high quality undervalued stocks to quickly scan for ideas that may better fit a value focused approach.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.