Head-To-Head Survey: Netlist (OTCMKTS:NLST) & FormFactor (NASDAQ:FORM)

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

Analyst Ratings

This is a summary of current recommendations and price targets for Netlist and FormFactor, as reported by MarketBeat.

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

Netlist currently has a consensus target price of $2.00, suggesting a potential upside of 196.30%. FormFactor has a consensus target price of $48.50, suggesting a potential upside of 37.08%. Given Netlist’s stronger consensus rating and higher probable upside, research analysts clearly believe Netlist is more favorable than FormFactor.

Profitability

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

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

Volatility & Risk

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

Institutional and Insider Ownership

0.0% of Netlist shares are held by institutional investors. Comparatively, 98.8% of FormFactor shares are held by institutional investors. 2.7% of Netlist shares are held by company insiders. Comparatively, 1.0% of FormFactor shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Netlist	$69.21 million	2.65	-$60.40 million	($0.22)	-3.07
FormFactor	$763.60 million	3.59	$69.61 million	$0.89	39.75

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.

Summary

FormFactor beats Netlist on 10 of the 14 factors compared between the two stocks.

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.

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.