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

Volatility & Risk

Axcelis Technologies has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500. Comparatively, FormFactor has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Axcelis Technologies and FormFactor, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Axcelis Technologies 0 2 3 0 2.60
FormFactor 0 1 4 1 3.00

Axcelis Technologies currently has a consensus price target of $30.40, indicating a potential upside of 4.29%. FormFactor has a consensus price target of $19.07, indicating a potential upside of 14.86%. Given FormFactor’s stronger consensus rating and higher probable upside, analysts clearly believe FormFactor is more favorable than Axcelis Technologies.

Profitability

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

Net Margins Return on Equity Return on Assets
Axcelis Technologies 10.80% 16.37% 10.94%
FormFactor 3.68% 16.80% 11.20%

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Axcelis Technologies $266.98 million 3.43 $11.00 million $1.19 24.50
FormFactor $383.88 million 3.16 -$6.55 million $0.26 63.85

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

Institutional and Insider Ownership

78.0% of Axcelis Technologies shares are owned by institutional investors. Comparatively, 84.4% of FormFactor shares are owned by institutional investors. 5.7% of Axcelis Technologies shares are owned by insiders. Comparatively, 2.3% of FormFactor shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

FormFactor beats Axcelis Technologies on 10 of the 15 factors compared between the two stocks.

Axcelis Technologies Company Profile

Axcelis Technologies, Inc. designs, manufactures and services ion implantation and other processing equipment used in the fabrication of semiconductor chips. The Company also provides aftermarket lifecycle products and services, including used tools, spare parts, equipment upgrades, maintenance services and customer training. The Company offers a complete line of high energy, high current and medium current implanters for all application requirements. The Company’s Purion XE high energy system combines its radio frequency (RF) Linac high energy, spot beam technology with the Purion platform. The Company also offers the Purion M medium current system. The Company’s Purion M systems also offer differentiation for specialty applications, such as hot silicon carbide. The Company’s Purion H high current system is extendable into ultra-low energy applications to satisfy future process requirements, including leakage current performance.

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.

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