FormFactor Stock Up 22% and Drawing a $35 Million New Stake as The Firm Beats Q3 Estimates
Key Points
New York City-based Shannon River Fund Management added 968,161 shares of FormFactor in the third quarter.
The move increased its exposure by an estimated $35.26 million.
As of September 30, the fund reported holding 968,161 FORM shares valued at $35.26 million.
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New York City-based Shannon River Fund Management initiated a new position in FormFactor (NASDAQ:FORM), adding 968,161 shares worth about $35.26 million as of a November 13 SEC filing.
What Happened
According to a November 13 SEC filing, Shannon River Fund Management LLC disclosed a new stake in FormFactor, acquiring 968,161 shares. The position, valued at $35.26 million as of September 30, accounted for 5.68% of the fund’s $621.17 million in reportable U.S. equity holdings. The fund reported a total of 20 positions after the filing.
What Else to Know
This new position now comprises 5.68% of the fund's reportable assets under management.
Top five holdings after the filing:
- NASDAQ:PEGA: $79.59 million (12.8% of AUM)
- NASDAQ:TSEM: $69.56 million (11.2% of AUM)
- NASDAQ:IDCC: $61.70 million (9.9% of AUM)
- NASDAQ:WIX: $58.63 million (9.4% of AUM)
- NASDAQ:FLEX: $49.24 million (7.9% of AUM)
As of Wednesday, shares were priced at $58.17, up 22% over the past year and solidly outperforming the S&P 500, which is up about 15% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $759.31 million |
| Net Income (TTM) | $40.84 million |
| Price (as of Wednesday) | $58.17 |
| One-Year Price Change | 22% |
Company Snapshot
- FormFactor, Inc. provides probe cards, analytical probes, probe stations, metrology systems, thermal systems, and cryogenic systems, primarily serving the semiconductor industry.
- The company generates revenue by designing, manufacturing, and selling advanced testing and measurement solutions used throughout the semiconductor manufacturing and research lifecycle.
- Primary customers include semiconductor integrated device manufacturers, foundries, fabless semiconductor companies, research institutions, and universities worldwide.
FormFactor, Inc. is a leading supplier of test and measurement solutions for the semiconductor sector, with a diversified product portfolio addressing both production and R&D needs. Its strategy centers on technological innovation and global reach, enabling it to serve a broad spectrum of customers from chip manufacturers to scientific institutions. The company's competitive edge lies in its specialized expertise and ability to support complex semiconductor testing requirements across multiple geographies.
Foolish Take
FormFactor doesn’t live in the headline-grabbing AI chip race, but it supplies the picks and shovels that tell chipmakers whether those increasingly complex designs actually work. That positioning showed up clearly in the latest quarter. Revenue reached $202.7 million, while gross margin expanded to 39.8% GAAP and 41.0% on a non-GAAP basis, up roughly 250 basis points sequentially. Free cash flow rebounded to $19.7 million after a weak second quarter, and management guided to another step up in revenue, earnings, and margins in Q4.
Notably, DRAM probe cards posted double-digit sequential growth, hitting a record driven by high-bandwidth memory demand, while the systems segment gained momentum toward initial volume production in co-packaged optics. That mix helps explain why this position landed as a mid-single-digit allocation rather than a token trade. In context, this fund already holds other IP- and semiconductor-adjacent names, but ultimately, FormFactor adds exposure to profitability improvement rather than pure cycle recovery.
Glossary
Assets Under Management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
13F Reportable Assets: U.S. equity securities that institutional investment managers must disclose quarterly to the SEC via Form 13F.
Position: The amount of a particular security or investment held by an individual or institution.
New Position: An investment in a security or asset that was not previously held in the portfolio.
Trailing Twelve Months (TTM): The 12-month period ending with the most recent quarterly report.
Forward P/E: Price-to-earnings ratio using forecasted earnings for the next year, estimating how much investors pay per dollar of future earnings.
EV/EBITDA: Enterprise value divided by earnings before interest, taxes, depreciation, and amortization; used to compare company value and profitability.
Fund Downsizing: The process of reducing the size or number of holdings in an investment fund, often to manage risk or liquidity.
Stake: The ownership interest or share an investor holds in a company or asset.
Probe Cards: Devices used to test semiconductor wafers by making temporary electrical contact with circuits during manufacturing.
Metrology Systems: Equipment used to measure and analyze physical properties of materials or devices, often for quality control in manufacturing.
Fabless Semiconductor Companies: Firms that design chips but outsource manufacturing to specialized fabrication plants (foundries).
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Wix.com. The Motley Fool recommends Flex. The Motley Fool has a disclosure policy.
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