Barclays Maintains an 'Equalweight' on FormFactor (FORM); DRAM Recovery Intact, But SOC Needed for Next Leg of Growth
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Price: $114.16 -1.34%
Rating Summary:
7 Buy, 6 Hold, 1 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
7 Buy, 6 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Barclays maintains an 'Equalweight' on FormFactor (NASDAQ: FORM) price target of $10.00.
Barclays analyst says, "While we recommended investing in FORM into earnings (see "SemiconWest Recap" note on 7/15) on expected strength in DRAM, our longer-term outlook remains balanced as we weigh a very good job in nearly reaching cash breakeven, solid execution, and a recovery in FORM's DRAM share with the reality that a pickup in SOC, which is necessary to drive real earnings power, is more of a 2H12/2013 story."
"Positives: 1) FORM has recaptured share lost in DRAM (read Elpida, early wins at SEC) as well as in NAND (we believe SEC); 2) New design activity for 3x/2x nodes plus higher complex/higher ASP mobile DRAM cards offers support for growth in 2H11; 3) Good opex control (expected to stay at ~$21M at $50M-$60M run-rate. Concerns: 1) Sep Q revenue guide slightly below consensus; 2) FORM guided to $6M cash burn for Sep Q - a little worse than expectations coming in though we view ex-working capital burn of only $3M (we now model cash flow breakeven in 4Q11)."
For more ratings news on FormFactor click here and for the rating history of FormFactor click here.
Shares of FormFactor closed at $9.63 yesterday.
Barclays analyst says, "While we recommended investing in FORM into earnings (see "SemiconWest Recap" note on 7/15) on expected strength in DRAM, our longer-term outlook remains balanced as we weigh a very good job in nearly reaching cash breakeven, solid execution, and a recovery in FORM's DRAM share with the reality that a pickup in SOC, which is necessary to drive real earnings power, is more of a 2H12/2013 story."
"Positives: 1) FORM has recaptured share lost in DRAM (read Elpida, early wins at SEC) as well as in NAND (we believe SEC); 2) New design activity for 3x/2x nodes plus higher complex/higher ASP mobile DRAM cards offers support for growth in 2H11; 3) Good opex control (expected to stay at ~$21M at $50M-$60M run-rate. Concerns: 1) Sep Q revenue guide slightly below consensus; 2) FORM guided to $6M cash burn for Sep Q - a little worse than expectations coming in though we view ex-working capital burn of only $3M (we now model cash flow breakeven in 4Q11)."
For more ratings news on FormFactor click here and for the rating history of FormFactor click here.
Shares of FormFactor closed at $9.63 yesterday.
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