Motley Fool Hidden Gems recommendation FormFactor (Nasdaq: FORM) is swinging in the breeze today, bouncing back about 9% after as much as an 18% pullback in after-hours trading.

The culprit was an earnings report in which revenue and earnings both came in below management and analyst expectations. Making matters worse, CEO Igor Khandros noted in the report that the market for the company's semiconductor testing equipment is weakening right now, particularly for memory makers, and that FormFactor would have to restructure "to better align with the market environment." That means a 14% headcount reduction in this "transition year."

We're not done yet. FormFactor lost some business to competitors like AdvanTest (NYSE: ATE) and Cascade Microtech (Nasdaq: CSCD), because production delays on a new wafer tester allowed some customers to greenlight the competition before FormFactor's solution. The first-mover advantage is alive and well on a business-to-business level.

Those ominous issues hung over the stock overnight like a thunderhead, waiting for a release. The most desperate sellers got out of their positions in the early hours, and the price pressure abated after that.

Where will this stock go now, after losing approximately half its value in just six months? I think we're looking at a rare discount to FormFactor's true value. More than half of the current billion-dollar market cap is supported by debt-free cash on hand. The enterprise value is just 6.3 times trailing operating earnings, after spending several years up to 2006 with the TEV/EBIT ratio comfortably in the 20s or better.

Massive discounts are not uncommon in these hysterical days of economic worries and myopic investing. Just in the technology hardware sector, I have now covered three such potentially tempting opportunities in the last 24 hours: FormFactor, NeuStar (NYSE: NSR), and SiRF (Nasdaq: SIRF). The bounce will come when these guys get on their feet again, and the returns will blow your mind. So what if you have to wait maybe a year or two? Doubles and triples are well worth some patience.

Further Foolishness:

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Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure will always be there for you.