FormFactor (NASDAQ:FORM – Get Free Report) and GCT Semiconductor (NYSE:GCTS – Get Free Report) are both technology companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, valuation and earnings.
Profitability
This table compares FormFactor and GCT Semiconductor’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| FormFactor | 17.72% | 18.88% | 15.84% |
| GCT Semiconductor | -1,301.99% | N/A | -189.45% |
Valuation & Earnings
This table compares FormFactor and GCT Semiconductor”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| FormFactor | $784.99 million | 8.67 | $54.36 million | $2.19 | 39.86 |
| GCT Semiconductor | $2.87 million | 32.53 | -$43.37 million | ($0.80) | -1.27 |
FormFactor has higher revenue and earnings than GCT Semiconductor. GCT Semiconductor is trading at a lower price-to-earnings ratio than FormFactor, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
FormFactor has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, GCT Semiconductor has a beta of 1.78, meaning that its stock price is 78% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current recommendations for FormFactor and GCT Semiconductor, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| FormFactor | 0 | 5 | 7 | 0 | 2.58 |
| GCT Semiconductor | 1 | 0 | 2 | 0 | 2.33 |
FormFactor presently has a consensus price target of $139.73, indicating a potential upside of 60.05%. GCT Semiconductor has a consensus price target of $3.50, indicating a potential upside of 244.83%. Given GCT Semiconductor’s higher possible upside, analysts clearly believe GCT Semiconductor is more favorable than FormFactor.
Insider & Institutional Ownership
98.8% of FormFactor shares are held by institutional investors. Comparatively, 28.1% of GCT Semiconductor shares are held by institutional investors. 0.8% of FormFactor shares are held by insiders. Comparatively, 3.8% of GCT Semiconductor shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Summary
FormFactor beats GCT Semiconductor on 9 of the 13 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 GCT Semiconductor
GCT Semiconductor Holding, Inc., operates as a fabless semiconductor company, designs, develops, and markets integrated circuits for the wireless semiconductor industry. The company provides RF and modem chipsets based on 4G LTE technology, including 4G LTE, 4.5G LTE Advanced, and 4.75G LTE Advanced-Pro. It also develops and sells cellular IoT chipsets for low-speed mobile networks such as eMTC/NB-IOT/Sigfox, and other network protocols; and 5G solutions. Its products and solutions are used in smartphones, tablets, hotspots, CPEs, USB dongles, routers, and M2M applications. The company sells its products directly or indirectly through distributors to original equipment manufacturers and original design manufacturers primarily in Taiwan, China, Korea and Japan, Europe, North America and South America. The company was formerly known as Global Communication Technology, Inc. GCT Semiconductor Holding, Inc. was founded in 1998 and is headquartered in San Jose, California.
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