Tuesday, December 29, 2015

FormFactor's SOC Business Could Propel Results : 60%+ Potential Upside $form, #earnings

*60% potential upside as topline growth rate about to potentially accelerate.

*SOC business about to break out to new highs led by mobile demand.

*Despite slower handset growth in '16, SOC up next year led by race for smaller and thinner.

*Uncharacteristic Q4 sequential growth as a potential early sign of things to come.


FormFactor (NASDAQ:FORM) likely reports in early February. The stock has been at or under $10 for several years now. Reading into their guidance and comments, we think the fundamentals and the numbers have a chance to break-out.
The company was historically exposed to the DRAM industry. They made a purchase several years ago entering the SOC (System on a Chip) space. Mobile has been the key driver to SOC as phones get smaller, thinner yet faster while at the same time eating up less power. FORM helps the manufacturer make that happen with their testing products.
As we all know the mobile handset market has been a key driver to overall technology. FORM said that it is the main driver to their overall businesses. The SOC business, though, has the most exposure to mobile and is about to start to see it in their numbers.

SOC Breakout In Q4

Fourth quarter is usually a seasonally slower quarter implying that normally trends should be down from Q3. This year the company guided to up revenues. We think this is a strong sign that something underlying is happening.
See Full Report



Chaim Siegel has been working with hedge funds and mutual funds as an analyst and PM his entire career. Chaim specializes in earnings and predicts, analyzes and reacts to earnings and earnings events as well as developing current company stories with a hedge fund perspective. If you want his analysis real time sign up to the right for real time email alerts.
Disclosure: These trades can lose you money and principle especially when using leverage BY USING THIS SITE YOU AGREE TO TAKE ALL RESPONSIBILITY FOR YOUR OUTCOMES AND LOSSES AND HOLD BESTIDEAS, ITS CONTRIBUTORS AND ELAZAR ADVISORS, LLC HARMLESS

No comments:

Post a Comment

Comment here: