Netlist (OTCMKTS:NLST) versus FormFactor (NASDAQ:FORM) Financial Comparison

FormFactor (NASDAQ:FORM) and Netlist (OTCMKTS:NLST) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Institutional and Insider Ownership

98.8% of FormFactor shares are owned by institutional investors. Comparatively, 0.0% of Netlist shares are owned by institutional investors. 1.0% of FormFactor shares are owned by insiders. Comparatively, 2.7% of Netlist shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares FormFactor and Netlist”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FormFactor	$763.60 million	3.86	$69.61 million	$0.89	42.71
Netlist	$69.21 million	2.58	-$60.40 million	($0.22)	-2.99

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

Volatility and Risk

FormFactor has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500. Comparatively, Netlist has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for FormFactor and Netlist, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FormFactor	0	5	3	0	2.38
Netlist	0	0	1	0	3.00

FormFactor currently has a consensus target price of $48.50, indicating a potential upside of 27.58%. Netlist has a consensus target price of $2.00, indicating a potential upside of 204.41%. Given Netlist’s stronger consensus rating and higher probable upside, analysts clearly believe Netlist is more favorable than FormFactor.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
FormFactor	9.12%	5.93%	4.89%
Netlist	-37.19%	-852.20%	-94.11%

Summary

FormFactor beats Netlist 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 Netlist

Netlist, Inc. designs, manufactures, and markets memory subsystems for the server, high-performance computing, and communications markets in the United States and internationally. The company portfolio of proprietary technologies and design techniques, includes efficient planar design, alternative packaging techniques, and custom semiconductor logic, to deliver memory subsystems; and sells specialty memory modules and flash-based products for use in data center and industrial applications. It resells component products, including solid state drive (SSD), NAND flash, and dual inline memory module (DIMM) to storage customers, appliance customers, system builders, and cloud and datacenter customers; and sells component inventory to distributors and other users of memory integrated circuits. The company markets and sells its products through a direct sales force and a network of independent sales representatives. Netlist, Inc. was incorporated in 2000 and is headquartered in Irvine, California.