Articles by Rich Smith

Technology

Why FormFactor Stock Exploded Higher Today

Here in the middle of the artificial intelligence (AI) revolution, semiconductor stocks are red-hot -- and of the reddest, hottest semiconductor stocks on the market today is FormFactor (FORM +25.71%), a maker of probe cards and other equipment for testing the quality of manufactured chips. FormFactor stock is flying today -- up 23.6% through 1:15 p.m. ET -- after the company beat on earnings last night. Analysts forecast FormFactor to earn just $0.25 per share on $200 million in third-quarter revenue, but FormFactor actually earned $0.33 per share on sales of $202.7 million. FormFactor Q3 earnings That's still a pretty small revenue number for such a big earnings surprise -- and what's perhaps most surprising is that FormFactor's revenue actually declined 2.5% year over year (although it was up sequentially). Still, as CEO Mike Slessor pointed out, FormFactor is really "focused on, and committed to, improving our profitability." And FormFactor's making some progress there. True, the company's $0.33 profit was only a non-GAAP (adjusted) number. But actual earnings as calculated according to generally accepted accounting principles (GAAP) also improved markedly, nearly doubling sequentially to $0.20 per share. Still, as with revenue, GAAP earnings were down year over year, falling about 17%. Is FormFactor stock a buy? Worst of all, FormFactor's forecast for Q4 is an anemic $0.19 per share in GAAP net income, despite sales growing to $210 million, plus or minus. These numbers appear to be better than what Wall Street is looking for. Still, with the stock valued at $4.5 billion, trailing net income less than $44 million, and a price-to-earnings ratio consequently hanging at a very high ratio of 102, I find it hard to get excited about the stock -- earnings beat notwithstanding. For me, I'm afraid FormFactor stock remains a sell.

Technology

Why C.H. Robinson Stock Exploded Higher Today

C.H. Robinson Worldwide (CHRW +20.21%) stock motored ahead 20.4% through 12:50 p.m. ET Thursday despite the freight transport and logistics company reporting mixed results last night. Heading into its Q3 report, analysts forecast Robinson would earn $1.30 per share on more than $4.2 billion in sales. In fact, while non-GAAP (generally accepted accounting principles) earnings were a better-than-expected $1.40, sales missed expectations at $4.1 billion. C.H. Robinson's Q3 earnings Robinson began its report on a down note, warning of "a continued soft freight environment," and CEO Dave Bozeman colorfully commented, "Truckload spot rates continue to bounce along the bottom due to low demand," while internationally, shipping has been disrupted by "front-loading" orders to avoid tariffs, leading to "dislocation of shipments." "This is a new C.H. Robinson," however, said Bozeman, "and we don't use the macro environment as an excuse" for missing numbers. Revenue may have fallen 11%, but Robinson offset that decline by cutting operating costs more than 12%. As a result, Robinson succeeded in growing net profit by 68%. In addition to beating on non-GAAP numbers, Robinson delivered a $1.34 per-share profit as calculated according to GAAP. Is C.H. Robinson Worldwide stock a buy? 2025's not done yet, but looking ahead, Robinson also raised guidance for 2026, with CFO Damon Lee predicting Robinson could conceivably earn as much as $6 a share next year as it captures market share and continues to expand profit margins. At its current $155 stock price, that works out to about a 26 times forward earnings valuation on the stock. For a commodity transport company pegged for only low-teens earnings growth over the next five years, that seems a bit expensive to me. Despite last night's earnings win, I can't yet call this stock a buy.