Lattice Semiconductor (NASDAQ:LSCC) and FormFactor (NASDAQ:FORM) Critical Comparison

FormFactor (NASDAQ:FORM) and Lattice Semiconductor (NASDAQ:LSCC) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.

Analyst Ratings

This is a summary of recent ratings and price targets for FormFactor and Lattice Semiconductor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FormFactor	0	4	6	1	2.73
Lattice Semiconductor	0	2	13	0	2.87

FormFactor currently has a consensus target price of $132.45, indicating a potential upside of 13.86%. Lattice Semiconductor has a consensus target price of $132.29, indicating a potential downside of 1.21%. Given FormFactor’s higher probable upside, equities research analysts plainly believe FormFactor is more favorable than Lattice Semiconductor.

Insider and Institutional Ownership

98.8% of FormFactor shares are owned by institutional investors. Comparatively, 98.1% of Lattice Semiconductor shares are owned by institutional investors. 0.8% of FormFactor shares are owned by insiders. Comparatively, 0.6% of Lattice Semiconductor shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk & Volatility

FormFactor has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500. Comparatively, Lattice Semiconductor has a beta of 1.78, indicating that its share price is 78% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
FormFactor	8.14%	9.31%	7.83%
Lattice Semiconductor	3.46%	8.48%	7.03%

Earnings and Valuation

This table compares FormFactor and Lattice Semiconductor”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FormFactor	$784.99 million	11.55	$54.36 million	$0.87	133.71
Lattice Semiconductor	$523.26 million	35.06	$3.08 million	$0.14	956.50

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

Summary

FormFactor beats Lattice Semiconductor on 10 of the 15 factors compared between the two stocks.

About FormFactor

FormFactor, Inc. designs, manufactures, and sells probe cards, analytical probes, probe stations, metrology systems, thermal systems, and cryogenic systems to semiconductor companies and scientific institutions in the United States, Taiwan, South Korea, China, Europe, Japan, Malaysia, Singapore, and internationally. It operates in two segments, Probe Cards and Systems. The company offers probe cards to test various semiconductor device types, including systems on a chip products, mobile application processors, microprocessors, microcontrollers, and graphic processors, as well as radio frequency, analog, mixed signal, image sensor, electro-optical, dynamic random access memory, NAND flash memory, and NOR flash memory devices, as well as computer processor devices; and analytical probes, which are used for a range of applications, including device characterization, electrical simulation model development, failure analysis, and prototype design debugging for universities, research institutions, semiconductor integrated device manufacturers, semiconductor foundries, and fabless semiconductor companies. It also provides probe systems for semiconductor design engineers to capture and analyze accurate data; surface metrology systems for the development, production, and quality control of semiconductor products; thermal subsystems, such as thermal chucks and other test systems used in probe stations and other applications; and precision cryogenic instruments, semiconductor tests, and measurement systems. In addition, the company offers on-site probe card maintenance and service training, seminars, and telephone support services. It markets and sells its products through direct sales force, manufacturers' representatives, and distributors. The company was incorporated in 1993 and is headquartered in Livermore, California.

About Lattice Semiconductor

Lattice Semiconductor Corporation, together with its subsidiaries, develops and sells semiconductor products in Asia, Europe, and the Americas. The company offers field programmable gate arrays that consist of four product families, including the Lattice Certus and ECP, Mach, iCE, and CrossLink. It also provides video connectivity application specific standard products. In addition, the company licenses its technology portfolio through standard IP and IP core licensing, patent monetization, and IP services. It sells its products directly to customers, and indirectly through a network of independent manufacturers' representatives and independent distributors. The company primarily serves original equipment manufacturers in the communications and computing, consumer, and industrial, and automotive markets. Lattice Semiconductor Corporation was incorporated in 1983 and is headquartered in Hillsboro, Oregon.