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Tower Semiconductor (TSEM)
NASDAQ:TSEM
Top Page
Tower
(NASDAQ:TSEM)
69Neutral
Positive Factors
Competitive Advantage
Tower Semiconductor has a significant amount of available capacity both inside and outside the United States, providing a competitive advantage over peers.
Earnings Performance
Tower turned in solid overall results that were in line with Street revenue expectations and were $0.04 ahead of the consensus earnings estimates.
RF Infrastructure Expansion
Tower Semiconductor's RF-Infrastructure expansion program in its San Antonio facility is operating at about 55%, indicating room for growth and expansion.
Negative Factors
Financial Contribution Concerns
Adani Group was not satisfied with the level of financial contribution Tower was willing to commit to the partnership.
Project Uncertainty
Adani Group paused discussions with Tower Semiconductor on the proposed $10 billion chip fab project due to strategic and commercial concerns.
Tower (TSEM) vs. S&P 500 (SPY)
Market Cap
$3.98B
Dividend YieldN/A
Average Volume (3M)628.87K
Price to Earnings (P/E)19.4
Beta (1Y)1.62
Revenue Growth0.94%
EPS Growth-60.23%
CountryUS
Employees5,613
SectorTechnology
Sector Strength65
IndustrySemiconductors
Share Statistics
EPS (TTM)0.59
Shares Outstanding111,069,860
10 Day Avg. Volume394,738
30 Day Avg. Volume628,870
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.20
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit14.05
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$60.00Price Target Upside60.00% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Tower Business Overview & Revenue Model
Company DescriptionTower Semiconductor Ltd., an independent semiconductor foundry, manufactures and markets analog intensive mixed-signal semiconductor devices in the United States, Japan, other Asia countries, and Europe. It provides various customizable process technologies, including SiGe, BiCMOS, mixed signal/CMOS, RF CMOS, CMOS image sensor, integrated power management, and MEMS. The company also offers wafer fabrication services and design enablement platform for design cycle, as well as transfer optimization and development process services to integrated device manufacturers and fabless companies. It serves various markets, such as consumer electronics, personal computers, communications, automotive, industrial, aerospace, military, and medical device products. The company was incorporated in 1993 and is headquartered in Migdal Haemek, Israel.
How the Company Makes MoneyTower Semiconductor makes money through its specialty foundry services, which include the fabrication and manufacturing of analog integrated circuits for a wide array of industries. Revenue is primarily generated from the sale of these semiconductor products to its clients, which include original equipment manufacturers (OEMs) and fabless semiconductor companies. Significant revenue streams include contracts and agreements with these clients for the development and supply of custom chip solutions. The company also enters into strategic partnerships and collaborations that enhance its technology offerings and market reach, contributing to its earnings. Tower Semiconductor's state-of-the-art fabrication facilities and investments in innovative process technologies play a crucial role in maintaining its competitive edge and driving revenue growth.
Tower Financial Statement Overview
Summary
Tower demonstrates strong operational efficiency and a stable balance sheet with conservative leverage. However, inconsistent revenue growth and volatility in free cash flow highlight areas for improvement. The company's financial health remains solid, but attention to revenue growth and cash flow stability is needed.Income Statement
Tower's gross profit margin and EBIT margin have shown stability over the years, with a recent dip in net income affecting net profit margin. Revenue growth rate has been inconsistent, indicating potential challenges in maintaining steady growth. The EBITDA margin remains robust, highlighting strong operational efficiency.72
Positive
Balance Sheet
The company's debt-to-equity ratio is low, suggesting a conservative leverage strategy which enhances financial stability. Return on Equity has decreased due to a decline in net income. The equity ratio indicates a solid financial position with a higher proportion of equity financing.80
Positive
Cash Flow
Operating cash flow is strong, yet the free cash flow has experienced volatility mainly due to significant capital expenditures. The free cash flow to net income ratio suggests challenges in converting profit into free cash flow.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.44B | 1.42B | 1.68B | 1.51B | 1.27B | Gross Profit |
| 339.44M | 353.52M | 466.31M | 329.12M | 233.32M | EBIT |
| 191.31M | 547.26M | 311.67M | 166.51M | 91.03M | EBITDA |
| 451.32M | 851.12M | 594.75M | 437.22M | 331.56M | Net Income Common Stockholders |
| 207.86M | 518.49M | 264.57M | 150.01M | 82.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.22B | 1.24B | 1.01B | 764.65M | 710.88M | Total Assets |
| 3.08B | 2.92B | 2.55B | 2.23B | 2.09B | Total Debt |
| 180.81M | 231.56M | 272.34M | 314.84M | 390.28M | Net Debt |
| -91.08M | -29.10M | -68.42M | 103.91M | 178.59M | Total Liabilities |
| 440.31M | 491.48M | 659.07M | 615.85M | 639.25M | Stockholders Equity |
| 2.65B | 2.43B | 1.90B | 1.62B | 1.46B |
| Cash Flow | Free Cash Flow | |||
| 12.53M | 232.06M | 316.28M | 107.48M | -37.09M | Operating Cash Flow |
| 448.68M | 676.56M | 529.82M | 421.29M | 276.56M | Investing Cash Flow |
| -400.24M | -720.85M | -329.45M | -338.94M | -363.61M | Financing Cash Flow |
| -32.45M | -30.41M | -66.65M | -76.86M | -61.19M |
Tower Technical Analysis
Positive
37.50
Price Trends
36.71
Positive
43.17
Negative
43.32
Negative
Market Momentum
0.11
Negative
54.98
Neutral
68.62
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 37.5 is above the 20-day moving average (MA) of 35.97, above the 50-day MA of 36.71, and below the 200-day MA of 43.32, indicating a neutral trend. The MACD of 0.11 indicates Negative momentum. The RSI at 54.98 is Neutral, neither overbought nor oversold. The STOCH value of 68.62 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
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $18.89B | 13.42 | 11.65% | 4.70% | 2.22% | -22.39% | |
73 Outperform | $47.53B | 20.29 | 26.02% | 2.11% | -7.21% | -15.29% | |
70 Outperform | $19.65B | 18.52 | 11.47% | 2.48% | 1.32% | 4.86% | |
70 Outperform | $20.38B | 19.57 | 6.33% | 1.28% | -25.35% | -70.00% | |
69 Neutral | $3.98B | 19.37 | 8.17% | ― | 0.94% | -60.23% | |
61 Neutral | $19.30B | 28.15 | -1.69% | ― | -4.42% | -120.96% | |
60 Neutral | $10.96B | 10.28 | -6.73% | 2.97% | 7.74% | -12.45% |
* Technology Sector Average
Performance Comparison
TSEM
Tower
37.50
1.02
2.80%
ASX
ASE Technology Holding Co
9.26
-0.83
-8.23%
NXPI
NXP Semiconductors
191.88
-67.49
-26.02%
STM
STMicroelectronics
23.93
-16.15
-40.29%
UMC
United Micro
7.45
-0.31
-3.99%
GFS
GlobalFoundries Inc
36.38
-16.25
-30.88%
Tower Earnings Call Summary
Earnings Call Date:Feb 10, 2025
(Q4-2024)
| % Change Since: -22.90%|
Next Earnings Date:May 14, 2025
Earnings Call Sentiment Positive
The sentiment is generally positive with significant revenue growth and strategic capacity investments contributing to optimism. However, challenges such as the anticipated decline in RF mobile revenue and discrete business present headwinds. The company's diverse technology platforms and strong market share growth in silicon photonics and germanium offset these challenges.Q4-2024 Updates
Positive Updates
Annual Revenue and Profit Growth
Concluded 2024 with an annual revenue of $1.44 billion and a net profit of $208 million. Achieved 18% revenue growth from Q1 to Q4 and 10% year-over-year growth for the fourth quarter.
Record RF Infrastructure Growth
RF Infrastructure revenue nearly doubled in 2024 to $241 million, and SiPho revenues more than tripled to $105 million.
Power Management and Discrete Revenue
Power management and discrete revenue was $426 million in 2024. Targeting growth in Power Management business unit in 2025 with advanced 300-millimeter platforms.
Strategic Capacity Investments
Committed to $300 million investment in New Mexico fab and $500 million in Agrate, Italy fab for capacity expansion, with $350 million for 5G capacity enhancement.
Silicon Photonics and Germanium Expansion
Silicon photonics gaining strong market share at 400G to 800G and entering volume production at 1.6T. Silicon germanium platform expected to continue growing in 2025.
Negative Updates
RF Mobile Revenue Decline
Anticipated decrease in RF mobile revenue in 2025 due to weaker forecasts in the Android market, with an estimated reduction of upper teens percentage.
Discrete Business Expected Decrease
Discrete business anticipated to decrease in 2025 due to discontinuation of lower margin legacy 150-millimeter activities at Fab 1.
Utilization Rates and Capacity Alignment
Fab 1 operated at 70% utilization, Fab 2 and Fab 9 at 55%, and Fab 7 at 90%. Strategic repurposing of capacities may result in lower overall utilization rates in the near term.
Company Guidance
During the Tower Semiconductor Fourth Quarter and Fiscal Year 2024 Earnings Conference Call, the company reported an annual revenue of $1.44 billion and a net profit of $208 million. The fourth-quarter revenue was $387 million, marking a Q1 to Q4 revenue growth of 18% and a year-over-year growth of 10%. Guidance for Q1 2025 is projected at a midpoint of $385 million, plus or minus 5%, with anticipated 10% year-over-year growth. The company foresees overall year-over-year growth for 2025, driven by sequential quarter-over-quarter revenue increases, particularly in the second half of the year as capacity investments reach fruition. Key areas like RF Infrastructure and SiPho are targeted for significant growth, while RF Mobile may experience some decline, primarily due to conditions in the Android market. The company plans substantial investments, including $300 million in Intel's New Mexico fab and $350 million to expand 5G capacities, aiming for a long-term revenue target of $2.66 billion per annum.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.