FormFactor enters October with a notable divergence: the stock has surged 34% over the past month to $136.25, yet the Street's consensus target sits barely above the current price, and a major new voice just arrived with a far more bullish view.
The most significant development this week came from Deutsche Bank, which initiated coverage on September 30 with a Buy rating and a $200 price target. That target is roughly 47% above the current price and well above where most other analysts on the stock are anchored. After July's earnings, TD Cowen cut its target from $150 to $100 while keeping a Hold, and Evercore ISI trimmed from $155 to $150 while maintaining Outperform. The overall consensus mean target of $138.63 is barely above the current $136.25 close, meaning the Street broadly views the stock as fairly valued at current levels. Deutsche Bank's initiation breaks sharply from that view, and at a bellwether firm, it is worth tracking how quickly others respond.
The bull case rests on FormFactor's positioning in advanced wafer testing for AI and memory, consistent gross margin improvement, and a Texas production ramp that could drive further operating leverage. The bear case centres on tariff headwinds, a more gradual pace of margin expansion, and a valuation that is already stretched: the trailing PE has climbed to 38.5, up roughly 10 points over the past 30 days, and the price-to-book is now 7.7. EPS momentum scores are strong, ranking in the 79th percentile on a 30-day basis and the 81st on a 90-day basis, but forward earnings growth expectations have moderated, with the 12-month forward year-on-year EPS increase ranking only in the 31st percentile.
Positioning in the lending market carries no meaningful pressure for the stock. Availability is extremely loose at around 3,517%, meaning there are roughly 35 shares available to borrow for every one currently lent out. Short interest is 4.1% of the free float, up about 28% over the past month, which in absolute terms means shorts have been adding alongside the rally. But with borrowing costs having fallen 30% over the week to just 0.34%, and the borrow market this uncrowded, there is no mechanical squeeze dynamic at work. Options sentiment has shifted away from defensiveness: the put/call ratio has dropped to 0.72, below its 20-day average of 0.77, a move consistent with the stock's recent strength. In late August and early September the PCR was running close to 1.4; the sharp decline mirrors the price recovery.
On insider activity, CEO Mike Slessor sold roughly $1.8 million of stock on September 16 under a pre-arranged 10b5-1 plan. Those sales were preplanned and at prices well below the current $136.25, so they carry limited informational weight. A director sold $202,000 on September 3 without a plan in place. Collectively, the 90-day net insider position is a sale of about $4.7 million, though the bulk of that reflects the CEO's scheduled programme rather than discretionary conviction selling.
The most recent earnings print in late July produced a one-day gain of 19.4% and a five-day gain of nearly 30%, the kind of reaction that has clearly drawn fresh interest to the name. The next report is scheduled for October 28, four weeks away. Wikipedia and ORTEX page view data show retail attention running at a z-score of 2.5 versus the company's own recent history, the highest attention reading captured in the data. Among close peers, ONTO gained 7.4% on the week and LRCX added 4.1%, suggesting sector tailwinds are real rather than company-specific. COHU was flat on the week, and AMKR slipped 0.8%, adding some dispersion to the picture.
The October 28 print is the next definitive test of whether Deutsche Bank's $200 thesis or the consensus $138 view is closer to what the business is actually delivering.
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