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TOWER SEMICONDUCTOR LTD (TSEM) Stock Fundamental Analysis

NASDAQ:TSEM - Nasdaq - IL0010823792 - Common Stock - Currency: USD

44.56  -0.58 (-1.28%)

Fundamental Rating

5

TSEM gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 107 industry peers in the Semiconductors & Semiconductor Equipment industry. Both the profitability and the financial health of TSEM get a neutral evaluation. Nothing too spectacular is happening here. TSEM has a decent growth rate and is not valued too expensively.


Dividend Valuation Growth Profitability Health

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6

1. Profitability

1.1 Basic Checks

In the past year TSEM was profitable.
In the past year TSEM had a positive cash flow from operations.
TSEM had positive earnings in each of the past 5 years.
Each year in the past 5 years TSEM had a positive operating cash flow.
TSEM Yearly Net Income VS EBIT VS OCF VS FCFTSEM Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 200M 400M 600M

1.2 Ratios

TSEM has a Return On Assets of 6.75%. This is in the better half of the industry: TSEM outperforms 71.03% of its industry peers.
Looking at the Return On Equity, with a value of 7.87%, TSEM is in line with its industry, outperforming 58.88% of the companies in the same industry.
TSEM has a Return On Invested Capital of 5.23%. This is in the better half of the industry: TSEM outperforms 66.36% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TSEM is below the industry average of 11.67%.
Industry RankSector Rank
ROA 6.75%
ROE 7.87%
ROIC 5.23%
ROA(3y)11.63%
ROA(5y)9.11%
ROE(3y)14.39%
ROE(5y)11.61%
ROIC(3y)7.43%
ROIC(5y)6.59%
TSEM Yearly ROA, ROE, ROICTSEM Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 10 20

1.3 Margins

Looking at the Profit Margin, with a value of 14.47%, TSEM is in the better half of the industry, outperforming 71.03% of the companies in the same industry.
In the last couple of years the Profit Margin of TSEM has grown nicely.
Looking at the Operating Margin, with a value of 12.88%, TSEM is in the better half of the industry, outperforming 68.22% of the companies in the same industry.
TSEM's Operating Margin has improved in the last couple of years.
TSEM has a worse Gross Margin (23.64%) than 76.64% of its industry peers.
In the last couple of years the Gross Margin of TSEM has grown nicely.
Industry RankSector Rank
OM 12.88%
PM (TTM) 14.47%
GM 23.64%
OM growth 3Y5.29%
OM growth 5Y12.9%
PM growth 3Y13.32%
PM growth 5Y14.69%
GM growth 3Y2.7%
GM growth 5Y4.89%
TSEM Yearly Profit, Operating, Gross MarginsTSEM Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 10 20 30

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5

2. Health

2.1 Basic Checks

TSEM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for TSEM has been increased compared to 1 year ago.
TSEM has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, TSEM has an improved debt to assets ratio.
TSEM Yearly Shares OutstandingTSEM Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20M 40M 60M 80M 100M
TSEM Yearly Total Debt VS Total AssetsTSEM Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B

2.2 Solvency

The Debt to FCF ratio of TSEM is 10.62, which is on the high side as it means it would take TSEM, 10.62 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 10.62, TSEM perfoms like the industry average, outperforming 52.34% of the companies in the same industry.
TSEM has a Debt/Equity ratio of 0.05. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of TSEM (0.05) is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 0.05
Debt/FCF 10.62
Altman-Z N/A
ROIC/WACC0.44
WACC12.02%
TSEM Yearly LT Debt VS Equity VS FCFTSEM Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 500M 1B 1.5B 2B 2.5B

2.3 Liquidity

A Current Ratio of 6.18 indicates that TSEM has no problem at all paying its short term obligations.
TSEM has a Current ratio of 6.18. This is amongst the best in the industry. TSEM outperforms 86.92% of its industry peers.
TSEM has a Quick Ratio of 5.23. This indicates that TSEM is financially healthy and has no problem in meeting its short term obligations.
TSEM's Quick ratio of 5.23 is amongst the best of the industry. TSEM outperforms 88.78% of its industry peers.
Industry RankSector Rank
Current Ratio 6.18
Quick Ratio 5.23
TSEM Yearly Current Assets VS Current LiabilitesTSEM Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B

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6

3. Growth

3.1 Past

TSEM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.98%, which is quite good.
Measured over the past years, TSEM shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.54% on average per year.
Looking at the last year, TSEM shows a small growth in Revenue. The Revenue has grown by 0.94% in the last year.
TSEM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.08% yearly.
EPS 1Y (TTM)12.98%
EPS 3Y10.12%
EPS 5Y16.54%
EPS Q2Q%7.27%
Revenue 1Y (TTM)0.94%
Revenue growth 3Y-1.62%
Revenue growth 5Y3.08%
Sales Q2Q%10.09%

3.2 Future

TSEM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.45% yearly.
The Revenue is expected to grow by 11.09% on average over the next years. This is quite good.
EPS Next Y0.96%
EPS Next 2Y9.88%
EPS Next 3Y11.98%
EPS Next 5Y12.45%
Revenue Next Year9.69%
Revenue Next 2Y11.09%
Revenue Next 3YN/A
Revenue Next 5YN/A

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
TSEM Yearly Revenue VS EstimatesTSEM Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 500M 1B 1.5B
TSEM Yearly EPS VS EstimatesTSEM Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 1 2 3 4

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4

4. Valuation

4.1 Price/Earnings Ratio

TSEM is valuated rather expensively with a Price/Earnings ratio of 20.73.
Compared to the rest of the industry, the Price/Earnings ratio of TSEM indicates a somewhat cheap valuation: TSEM is cheaper than 77.57% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 29.62. TSEM is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 20.53, TSEM is valued on the expensive side.
Based on the Price/Forward Earnings ratio, TSEM is valued a bit cheaper than the industry average as 78.50% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of TSEM to the average of the S&P500 Index (22.70), we can say TSEM is valued inline with the index average.
Industry RankSector Rank
PE 20.73
Fwd PE 20.53
TSEM Price Earnings VS Forward Price EarningsTSEM Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

TSEM's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. TSEM is cheaper than 92.52% of the companies in the same industry.
TSEM's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 290.64
EV/EBITDA 6.71
TSEM Per share dataTSEM EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 5 10 15 20

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
TSEM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)21.67
PEG (5Y)1.25
EPS Next 2Y9.88%
EPS Next 3Y11.98%

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0

5. Dividend

5.1 Amount

No dividends for TSEM!.
Industry RankSector Rank
Dividend Yield N/A

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TOWER SEMICONDUCTOR LTD

NASDAQ:TSEM (2/24/2025, 2:58:09 PM)

44.56

-0.58 (-1.28%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)02-10 2025-02-10/bmo
Earnings (Next)05-07 2025-05-07/bmo
Inst Owners66.03%
Inst Owner Change-83.51%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap4.95B
Analysts80
Price Target57.9 (29.94%)
Short Float %1.12%
Short Ratio1.57
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.07%
Min EPS beat(2)5.44%
Max EPS beat(2)10.7%
EPS beat(4)4
Avg EPS beat(4)11.52%
Min EPS beat(4)5.44%
Max EPS beat(4)15.47%
EPS beat(8)6
Avg EPS beat(8)2.9%
EPS beat(12)10
Avg EPS beat(12)5.54%
EPS beat(16)13
Avg EPS beat(16)5.61%
Revenue beat(2)0
Avg Revenue beat(2)-1.93%
Min Revenue beat(2)-1.94%
Max Revenue beat(2)-1.91%
Revenue beat(4)0
Avg Revenue beat(4)-1.66%
Min Revenue beat(4)-1.94%
Max Revenue beat(4)-1.14%
Revenue beat(8)0
Avg Revenue beat(8)-1.56%
Revenue beat(12)1
Avg Revenue beat(12)-1.42%
Revenue beat(16)1
Avg Revenue beat(16)-1.64%
PT rev (1m)-1.28%
PT rev (3m)-1.28%
EPS NQ rev (1m)-8.89%
EPS NQ rev (3m)-4.65%
EPS NY rev (1m)-6.56%
EPS NY rev (3m)-8.57%
Revenue NQ rev (1m)0.27%
Revenue NQ rev (3m)0.33%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)-0.56%
Valuation
Industry RankSector Rank
PE 20.73
Fwd PE 20.53
P/S 3.45
P/FCF 290.64
P/OCF 11.03
P/B 1.87
P/tB 1.88
EV/EBITDA 6.71
EPS(TTM)2.15
EY4.82%
EPS(NY)2.17
Fwd EY4.87%
FCF(TTM)0.15
FCFY0.34%
OCF(TTM)4.04
OCFY9.07%
SpS12.93
BVpS23.77
TBVpS23.68
PEG (NY)21.67
PEG (5Y)1.25
Profitability
Industry RankSector Rank
ROA 6.75%
ROE 7.87%
ROCE 6.62%
ROIC 5.23%
ROICexc 9.27%
ROICexgc 9.33%
OM 12.88%
PM (TTM) 14.47%
GM 23.64%
FCFM 1.19%
ROA(3y)11.63%
ROA(5y)9.11%
ROE(3y)14.39%
ROE(5y)11.61%
ROIC(3y)7.43%
ROIC(5y)6.59%
ROICexc(3y)13.75%
ROICexc(5y)11.76%
ROICexgc(3y)13.89%
ROICexgc(5y)11.9%
ROCE(3y)9.41%
ROCE(5y)8.35%
ROICexcg growth 3Y-5.99%
ROICexcg growth 5Y4.5%
ROICexc growth 3Y-5.69%
ROICexc growth 5Y4.76%
OM growth 3Y5.29%
OM growth 5Y12.9%
PM growth 3Y13.32%
PM growth 5Y14.69%
GM growth 3Y2.7%
GM growth 5Y4.89%
F-Score5
Asset Turnover0.47
Health
Industry RankSector Rank
Debt/Equity 0.05
Debt/FCF 10.62
Debt/EBITDA 0.29
Cap/Depr 162.11%
Cap/Sales 30.06%
Interest Coverage 250
Cash Conversion 99.41%
Profit Quality 8.19%
Current Ratio 6.18
Quick Ratio 5.23
Altman-Z N/A
F-Score5
WACC12.02%
ROIC/WACC0.44
Cap/Depr(3y)153.2%
Cap/Depr(5y)141.19%
Cap/Sales(3y)27.71%
Cap/Sales(5y)25.75%
Profit Quality(3y)38.23%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)12.98%
EPS 3Y10.12%
EPS 5Y16.54%
EPS Q2Q%7.27%
EPS Next Y0.96%
EPS Next 2Y9.88%
EPS Next 3Y11.98%
EPS Next 5Y12.45%
Revenue 1Y (TTM)0.94%
Revenue growth 3Y-1.62%
Revenue growth 5Y3.08%
Sales Q2Q%10.09%
Revenue Next Year9.69%
Revenue Next 2Y11.09%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-8.01%
EBIT growth 3Y3.58%
EBIT growth 5Y16.37%
EBIT Next Year140.41%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-92.66%
FCF growth 3Y-45.89%
FCF growth 5Y-29.8%
OCF growth 1Y-33.68%
OCF growth 3Y2.12%
OCF growth 5Y9.02%