Head to Head Review: FormFactor (NASDAQ:FORM) and Teradyne (NASDAQ:TER)

Teradyne (NASDAQ:TER – Get Free Report) and FormFactor (NASDAQ:FORM – Get Free Report) are both technology companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitability.

Risk and Volatility

Teradyne has a beta of 1.78, suggesting that its share price is 78% more volatile than the S&P 500. Comparatively, FormFactor has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500.

Insider and Institutional Ownership

99.8% of Teradyne shares are owned by institutional investors. Comparatively, 98.8% of FormFactor shares are owned by institutional investors. 0.2% of Teradyne shares are owned by company insiders. Comparatively, 0.8% of FormFactor 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.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Teradyne and FormFactor, as reported by MarketBeat.com.

Teradyne currently has a consensus target price of $396.80, indicating a potential upside of 4.50%. FormFactor has a consensus target price of $127.45, indicating a potential upside of 10.88%. Given FormFactor’s higher possible upside, analysts clearly believe FormFactor is more favorable than Teradyne.

Profitability

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

Valuation & Earnings

This table compares Teradyne and FormFactor”s top-line revenue, earnings per share and valuation.

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

Summary

Teradyne beats FormFactor on 11 of the 14 factors compared between the two stocks.

About Teradyne

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Teradyne, Inc. designs, develops, manufactures, and sells automated test systems and robotics products worldwide. It operates through four segments; Semiconductor Test, System Test, Robotics, and Wireless Test. The Semiconductor Test segment offers products and services for wafer level and device package testing of semiconductor devices in automotive, industrial, communications, consumer, smartphones, cloud, computer and electronic game, and other applications. This segment also provides FLEX test platform systems; J750 test system to address the volume semiconductor devices, including microcontrollers; Magnum platform that tests memory devices, such as flash memory and DRAM; and ETS platform for semiconductor manufacturers, and assembly and test subcontractors in the analog/mixed signal markets. It serves integrated device manufacturers that integrate the fabrication of silicon wafers into their business; fabless companies that outsource the manufacturing of silicon wafers; foundries; and semiconductor assembly and test providers. The System Test segment offers defense/aerospace test instrumentation and systems; storage and system level test systems; and circuit-board test and inspection systems. The Wireless Test segment provides wireless test solutions for silicon validation, wireless module manufacturing, and wireless end device manufacturing under the LitePoint brand. This segment also offers IQxel-MX and IQxel-MW7G series products for edge measurement performance in the manufacturing of connectivity products; IQxstream-5G and IQgig-5G family products to support 4G and 5G technologies; and IQgig-UWB+ for certification and manufacturing test support for ultra wideband products. The Robotics segment provides collaborative robotic arms, autonomous mobile robots, and advanced robotic control software for manufacturing, logistics, and industrial customers. The company was incorporated in 1960 and is headquartered in North Reading, Massachusetts.

About FormFactor

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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.