Tower Semiconductor (TSEM)
NASDAQ:TSEM
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Tower
(NASDAQ:TSEM)
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Rating:74Outperform
Price Target:
$262.00
▲(15.70% Upside)
Action:Reiterated
Date:05/15/26
The score is driven primarily by solid underlying financial performance (especially balance sheet strength) and a very positive earnings-call outlook with improving growth/margins and strong forward visibility. These positives are partly offset by a stretched technical setup (overbought signals) and a premium valuation (high P/E with no dividend yield provided).
Positive Factors
Conservative balance sheet
Very low debt-to-equity (~0.05) and materially growing shareholders' equity provide durable financial flexibility. This supports large multi-year CapEx, preserves borrowing capacity, and cushions cyclical semiconductor volatility, enabling multi‑year capacity builds without jeopardizing liquidity or credit standing.
Negative Factors
Indium phosphide supply constraint
Material shortages for indium phosphide can materially delay ramps for integrated lasers and modulators. Because these components are critical to key SiPho products, constrained supply risks pushing out revenue recognition, reducing near-term utilization and slowing realization of higher-margin photonics revenue.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet
Very low debt-to-equity (~0.05) and materially growing shareholders' equity provide durable financial flexibility. This supports large multi-year CapEx, preserves borrowing capacity, and cushions cyclical semiconductor volatility, enabling multi‑year capacity builds without jeopardizing liquidity or credit standing.
Read all positive factors
Tower (TSEM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$29.38B
Dividend YieldN/A
Average Volume (3M)2.24M
Price to Earnings (P/E)131.3
Beta (1Y)1.59
Revenue Growth10.53%
EPS Growth19.13%
CountryUS
Employees5,613
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)2.18
Shares Outstanding111,756,620
10 Day Avg. Volume1,931,740
30 Day Avg. Volume2,237,334
Financial Highlights & Ratios
PEG Ratio11.32
Price to Book (P/B)4.59
Price to Sales (P/S)8.52
P/FCF Ratio-324.84
Enterprise Value/Market Cap1.07
Enterprise Value/Revenue19.31
Enterprise Value/Gross Profit77.96
Enterprise Value/Ebitda53.85
Forecast
1Y Price Target
$317.83Price Target Upside40.35% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)2.99
Revenue Forecast (FY)$1.86B
Tower Business Overview & Revenue Model
Company Description
Tower Semiconductor Ltd. operates as a prominent independent semiconductor foundry, engaged in the worldwide production and sale of analog-intensive, mixed-signal semiconductor components. The company provides a comprehensive suite of customizable...
How the Company Makes Money
Tower makes money primarily by selling semiconductor wafer fabrication services (foundry revenue) to fabless semiconductor companies and integrated device manufacturers that outsource manufacturing. Customers pay for wafers produced using Tower’s ...
Tower Earnings Call Summary
Earnings Call Date:May 13, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call presents a strong positive operational and financial performance in Q1 2026: top-line growth (+15% YoY), significant margin and profit expansion (gross profit +52% YoY; net profit +62% YoY), robust SiPho momentum (3x YoY growth) and meaningful forward visibility with $1.3B contractual 2027 commitments and $290M in prepayments. Strategic wins, multiple technology breakthroughs, capacity expansion plans and a solid balance sheet (S&P rating reaffirmed with positive outlook) further support a favorable outlook. Near-term headwinds include RF mobile softness during the 200mm→300mm transition, some fab qualification-driven utilization drag, supply constraints (indium phosphide starting material), and a higher normalized tax rate (15%–18%) after a one-time Q1 benefit. Management expects continued quarter-over-quarter revenue and margin growth and has a multi‑year CapEx plan to scale SiPho/SiGe capacity. Overall, highlights materially outweigh the lowlights, with clear revenue visibility and technology leadership balanced against manageable timing and supply risks.Positive Updates
Strong Top-Line Growth
Q1 2026 revenue of $414.0M, up 15% year-over-year from $358.0M; company guides Q2 2026 mid-range revenue of $455M ±5% (highest revenue in company history), implying +22% YoY and ~+10% quarter-over-quarter growth.
Negative Updates
Short-Term RF Mobile Weakness
RF mobile (RFSOI/200mm) experienced a sizeable sequential decline (noted ~36% QoQ in Q1 commentary), driven by transition timing and an exceptional Q4 2025 comp; management expects 2026 to be down vs. 2025 with recovery in 2027–2028 as 300mm design wins ramp.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Top-Line Growth
Q1 2026 revenue of $414.0M, up 15% year-over-year from $358.0M; company guides Q2 2026 mid-range revenue of $455M ±5% (highest revenue in company history), implying +22% YoY and ~+10% quarter-over-quarter growth.
Read all positive updates
Company Guidance
Management guided Q2 2026 to a mid‑range revenue of $455M ±5% (≈$432M–$478M), calling it the highest‑ever quarter and implying +22% YoY and +10% QoQ growth, and reiterated a goal of sequential revenue and margin expansion through 2026. That outlook is supported by Q1 results: revenue $414M (+15% YoY), gross profit $111M (~27% gross margin, +52% YoY), operating profit $65M (+96% YoY), net profit $65M (+62% YoY) and net margin 16% (vs. 11% in Q1‑2025), EPS $0.58 basic/$0.57 diluted. Visibility includes $1.3B of contracted SiPho revenue for 2027 (larger 2028 contracts) with ~$290M in customer prepayments, a $920M SiGe/SiPho CapEx plan (≈40% paid, remainder in 2026–27), long‑term targets of $2.8B revenue / $1.12B gross profit / $900M operating profit / $750M net profit, and a strong balance sheet (assets $3.7B, current ratio ~5.6x, equity ~$3.0B); normalized tax rate expected ~15–18%.Tower Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
88
Very Positive
Cash Flow
67
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.62B | 1.57B | 1.44B | 1.42B | 1.68B | 1.51B |
| Gross Profit | 401.63M | 363.85M | 339.44M | 353.52M | 466.31M | 329.12M |
| EBITDA | 581.44M | 543.50M | 451.32M | 847.31M | 590.30M | 433.12M |
| Net Income | 245.36M | 220.47M | 207.86M | 518.49M | 264.57M | 150.01M |
Balance Sheet | ||||||
| Total Assets | 3.70B | 3.32B | 3.08B | 2.92B | 2.55B | 2.23B |
| Cash, Cash Equivalents and Short-Term Investments | 1.50B | 1.15B | 1.22B | 1.24B | 1.01B | 763.87M |
| Total Debt | 155.86M | 161.52M | 180.81M | 231.56M | 272.34M | 314.84M |
| Total Liabilities | 726.52M | 417.71M | 440.31M | 491.48M | 659.07M | 615.85M |
| Stockholders Equity | 2.97B | 2.90B | 2.65B | 2.43B | 1.89B | 1.62B |
Cash Flow | ||||||
| Free Cash Flow | 326.12M | -41.08M | 12.53M | 232.06M | 163.42M | 107.48M |
| Operating Cash Flow | 819.24M | 395.48M | 448.68M | 676.56M | 529.82M | 421.29M |
| Investing Cash Flow | -836.63M | -398.09M | -400.24M | -720.85M | -329.45M | -338.94M |
| Financing Cash Flow | -11.77M | -33.35M | -32.45M | -30.41M | -66.65M | -76.86M |
Tower Technical Analysis
Positive
226.45
Price Trends
234.75
Positive
187.15
Positive
140.03
Positive
Market Momentum
6.92
Positive
61.50
Neutral
78.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSEM, the sentiment is Positive. The current price of 226.45 is below the 20-day moving average (MA) of 261.35, below the 50-day MA of 234.75, and above the 200-day MA of 140.03, indicating a bullish trend. The MACD of 6.92 indicates Positive momentum. The RSI at 61.50 is Neutral, neither overbought nor oversold. The STOCH value of 78.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSEM.
Tower Risk Analysis
Tower disclosed 43 risk factors in its most recent earnings report. Tower reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Tower Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $19.27B | -806.74 | -2.15% | ― | 65.19% | 73.74% | |
76 Outperform | $18.53B | 73.01 | 21.21% | ― | 21.32% | 19.06% | |
74 Outperform | $29.38B | 131.34 | 8.54% | ― | 10.53% | 19.13% | |
74 Outperform | $4.28B | 20.50 | 12.33% | 1.52% | -3.42% | -6.78% | |
69 Neutral | $15.53B | -487.34 | -5.68% | ― | 14.22% | 81.01% | |
64 Neutral | $20.52B | 48.50 | 9.96% | 0.81% | 12.71% | 37.49% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
TSEM
Tower
286.86
247.90
636.29%
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92.97
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Tower Corporate Events
Tower Semiconductor Sets July 2, 2026 Shareholder Meeting to Vote on Board, Executive Pay and Auditor
May 21, 2026
Tower Semiconductor will convene its Annual General Meeting of Shareholders on July 2, 2026, at its Migdal Haemek headquarters, with shareholders of record as of May 26, 2026 eligible to participate and vote. The agenda includes electing ten direc...
Tower Semiconductor posts strong Q1 2026 results and guides to record Q2 revenue
May 13, 2026
On May 13, 2026, Tower Semiconductor reported first-quarter 2026 results showing revenue of $414 million, up 15% year over year, with gross profit rising 52% to $111 million and operating profit nearly doubling to $65 million. Net profit climbed t...
Tower Semiconductor Secures $1.3 Billion 2027 Silicon Photonics Contracts and $290 Million Prepayments
May 13, 2026
Tower Semiconductor announced on May 13, 2026, that it has signed Silicon Photonics contracts with major customers securing $1.3 billion in revenue for 2027, backed by $290 million in received capacity-reservation prepayments and broader demand fr...
Tower Semiconductor Outlook Raised to Positive as S&P Maalot Reaffirms ilAA Rating
May 5, 2026
On May 5, 2026, Tower Semiconductor reported that Israeli rating agency SP Maalot completed its annual review and reaffirmed the company’s corporate credit rating at “ilAA.” The agency simultaneously upgraded Tower’s rating...
Tower Semiconductor Sets May–June 2026 Investor Conference Schedule
May 4, 2026
Tower Semiconductor, a leading analog-focused chip foundry serving sectors from consumer and industrial to automotive and aerospace, operates multiple 200mm fabs in Israel, the U.S. and Japan, and shares a 300mm facility in Agrate, Italy with STMi...
Tower Semiconductor and Axiro Launch U.S.-Made SiGe Beamforming ICs for Defense Radar
Apr 27, 2026
Tower Semiconductor, a major analog-focused foundry with a strong presence in aerospace and defense, and Axiro Semiconductor, a U.S.-based RF and radar IC specialist, have collaborated to deliver high-performance radar beamforming integrated circu...
Tower Semiconductor Sets May 13 Release for Q1 2026 Results and Investor Call
Apr 20, 2026
Tower Semiconductor, a specialist in high‑value analog semiconductor manufacturing for applications ranging from automotive and industrial to medical and aerospace and defense, operates a global network of 200mm and 300mm fabrication facilit...
Tower Semiconductor, Nuvoton to Restructure TPSCo Fabs in Japan
Mar 25, 2026
On March 25, 2026, Tower Semiconductor and Nuvoton Technology Corporation Japan agreed to a strategic restructuring of their joint venture Tower Partners Semiconductor Co. (TPSCo), which operates 12‑inch and 8‑inch fabs in Japan. Under...
Tower Semiconductor to Take Full Control of Japan 300mm Fab and Plan Major Capacity Expansion
Mar 25, 2026
On March 25, 2026, Tower Semiconductor announced a strategic restructuring of its Japan operations, under which it will take full ownership of the 300mm Fab 7 through a new wholly owned Japanese subsidiary, while Nuvoton Technology Corporation Jap...
Tower and Coherent Hit 400Gbps Lane Milestone in Silicon Photonics for Next-Gen AI Data Centers
Mar 23, 2026
On March 23, 2026, Tower Semiconductor and photonics group Coherent announced a breakthrough demonstration of 400 Gbps per lane data transmission using a silicon Mach–Zehnder modulator built on Tower’s production‑ready silicon ph...
Tower Semiconductor Unveils Gen3 LDMOS Platform to Tackle AI Data Centers’ Power Wall
Mar 17, 2026
On March 17, 2026, Tower Semiconductor announced a new generation of BCD technology within its Gen3 power management platform, delivering industry‑leading LDMOS performance for high‑current applications such as AI data centers and adva...
Tower Semiconductor, Oriole Partner on Nanosecond Optical Switching for AI Networks
Mar 16, 2026
On March 16, 2026, Tower Semiconductor announced a collaboration with Oriole Networks to advance AI infrastructure and data‑center networking using nanosecond optical circuit switching built on Tower’s mature silicon photonics platform...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.