Financial Analysis: FormFactor (NASDAQ:FORM) vs. TranSwitch (OTCMKTS:TXCCQ)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
FormFactor	6.93%	6.64%	5.58%
TranSwitch	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of recent ratings and price targets for FormFactor and TranSwitch, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FormFactor	0	7	5	1	2.54
TranSwitch	0	0	0	0	0.00

FormFactor presently has a consensus price target of $92.45, suggesting a potential downside of 35.76%. Given TranSwitch’s higher probable upside, analysts plainly believe TranSwitch is more favorable than FormFactor.

Institutional & Insider Ownership

98.8% of FormFactor shares are held by institutional investors. 0.8% of FormFactor shares are held by company insiders. Comparatively, 6.3% of TranSwitch shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FormFactor	$784.99 million	14.29	$54.36 million	$0.69	208.59
TranSwitch	N/A	N/A	N/A	N/A	N/A

FormFactor has higher revenue and earnings than TranSwitch.

Summary

FormFactor beats TranSwitch on 8 of the 10 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 TranSwitch

TranSwitch Corporation, together with its subsidiaries, designs, develops, and supplies integrated circuit and intellectual property solutions that provide functionality for voice, data, and video communications equipment for the customer premises and network infrastructure markets. The company provides integrated multi-core network processor system-on-a-chip (SoC) solutions for fixed, 3G and 4G mobile, VoIP, and multimedia applications. It offers converged network infrastructure products, including infrastructure VoIP processors for wire-line and wireless carrier equipment; access VoIP processors; and EoS/EoPDH mappers and framers for carriers to transport data traffic over SONET, SDH, and PDH networks. The company also offers broadband customer premises equipment, such as connectivity solutions comprising HDMI, DisplayPort, MHL, HDP, Ethernet IP cores, and MHDP transceivers for consumer electronics, home network equipment, and industrial and automotive applications; and multi-service SoCs for customer premises equipment that support telephone voice, fax, and routing functionality over broadband access networks. TranSwitch Corporation sells its products to public network system original equipment manufacturers (OEMs), WAN and LAN equipment OEMs, Internet-oriented OEMs, and communications test and performance measurement equipment OEMs; and government, universities, and private laboratories. The company offers its products directly in North America, Taiwan, China, Japan, Korea, and Europe, as well as through a network of distributors in North America, Asia, and Europe. TranSwitch Corporation was founded in 1988 and is headquartered in Shelton, Connecticut. On November 21, 2013, TranSwitch Corporation filed a voluntary petition for liquidation under Chapter 7 in the U.S. Bankruptcy Court for the District of Connecticut.