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

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%

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FormFactor $383.88 million 2.98 -$6.55 million $0.26 60.19
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.

Insider and Institutional Ownership

84.4% of FormFactor shares are held by institutional investors. Comparatively, 92.7% of Ultratech shares are held by institutional investors. 2.3% of FormFactor shares are held by company insiders. Comparatively, 5.9% of Ultratech shares are held 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 Ratings

This is a breakdown of current ratings and target prices for FormFactor and Ultratech, as provided 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 currently has a consensus price target of $19.07, suggesting a potential upside of 21.83%. 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 analysts plainly believe FormFactor is more favorable than Ultratech.

Risk and Volatility

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

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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