Financial Survey: Ultratech (UTEK) versus FormFactor (FORM)

FormFactor (NASDAQ: FORM) and Ultratech (NASDAQ:UTEK) are both small-cap technology companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Profitability

This table compares FormFactor and Ultratech’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FormFactor 3.68% 16.80% 11.20%
Ultratech 5.17% 3.22% 2.83%

Risk and Volatility

FormFactor has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500. Comparatively, Ultratech has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500.

Valuation and Earnings

This table compares FormFactor and Ultratech’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FormFactor $383.88 million 3.07 -$6.55 million $0.26 62.12
Ultratech N/A N/A N/A $0.57 53.04

Ultratech has lower revenue, but higher earnings than FormFactor. Ultratech is trading at a lower price-to-earnings ratio than FormFactor, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for FormFactor and Ultratech, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FormFactor 0 1 4 1 3.00
Ultratech 0 3 0 0 2.00

FormFactor presently has a consensus price target of $19.07, suggesting a potential upside of 18.06%. Ultratech has a consensus price target of $28.88, suggesting a potential downside of 4.47%. Given FormFactor’s stronger consensus rating and higher possible upside, equities research analysts clearly believe FormFactor is more favorable than Ultratech.

Institutional and Insider Ownership

84.4% of FormFactor shares are owned by institutional investors. Comparatively, 92.7% of Ultratech shares are owned by institutional investors. 2.3% of FormFactor shares are owned by company insiders. Comparatively, 5.9% of Ultratech shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

FormFactor beats Ultratech on 9 of the 13 factors compared between the two stocks.

FormFactor Company Profile

FormFactor, Inc. is a provider of test and measurement solutions. The Company’s segments include the Probe Cards segment and Systems segment. The Company designs, manufactures and sells multiple product lines, including probe cards, analytical probes, probe stations, integrated measurement systems, thermal sub-systems, reliability test systems, and related services. Its products provide electrical information from a range of semiconductor and electro-optical devices and integrated circuits (devices) from development to production. Probe Cards segment consists of probe card products and analytical probes. Systems segment consists of wafer probing, thermal and reliability products to enable precision on-wafer measurement of integrated circuits. Systems products are used in the early phases of the development and characterization of semiconductor processes.

Ultratech Company Profile

Ultratech, Inc. (Ultratech) develops, manufactures and markets photolithography, laser thermal processing and inspection equipment. The Company operates through the manufacture and distribution of capital equipment to manufacturers of integrated circuits and nanotechnology components segment. The Company serves manufacturers of semiconductor devices, including packaging processes and various nanotechnology components such as laser diodes, high-brightness light emitting diodes (HBLEDs) and micro-electro-mechanical systems (MEMS), as well as atomic layer deposition systems (ALD) for customers located throughout the world. It has operations in North America, Europe, Singapore, Japan, Taiwan, Korea and the rest of Asia. The Company supplies step-and-repeat photolithography systems based on one-to-one (1X) imaging technology to customers located throughout North America, Europe and Asia.

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