Tower Semiconductor (NASDAQ:TSEM) Posts Quarterly Earnings Results, Misses Expectations By $0.02 EPS

Tower Semiconductor (NASDAQ:TSEM) released its earnings results on Monday. The semiconductor company reported $1.05 EPS for the quarter, missing the consensus estimate of $1.07 by ($0.02), Zacks reports. The firm had revenue of $526.16 million during the quarter, compared to analyst estimates of $521.83 million. Tower Semiconductor had a return on equity of 11.94% and a net margin of 19.36%. The firm’s revenue was up 32.8% on a year-over-year basis. During the same quarter last year, the business posted $0.47 EPS.

Here are the key takeaways from Tower Semiconductor’s conference call:

• Record third-quarter results included $526 million in revenue, up 36% year over year, and $120 million in net income, with a 23% net margin. Management guided to approximately $600 million of fourth-quarter revenue, implying roughly $2 billion for full-year 2026.
• Silicon photonics demand is accelerating on AI infrastructure growth. Tower expects year-end SiPho start capacity to be about double the level supporting third-quarter shipments, with signed or advanced customer commitments extending through 2029 and the $920 million expansion expected to achieve a full return on investment within one year.
• Management raised its long-term financial model to $3.6 billion in annual revenue, $1.63 billion in gross profit, and $1.2 billion in net profit, supported by a richer SiPho and SiGe product mix. The company also highlighted opportunities in near-packaged optics, integrated lasers, 3.2-terabit products, and optical circuit switching.
• Capacity expansion is progressing ahead of schedule, but additional depreciation from newly installed tools is expected to reduce incremental gross margins from the unusually high 62% level reported in the quarter toward a long-term 55%–58% range.
• Tower acknowledged increasing competition in silicon photonics and silicon germanium, although executives said customer contracts, high yields, leading-edge technology, and long-term partnerships should help preserve a strong market position. Near-packaged optics adoption remains an opportunity, but its near-term contribution depends on customer and market adoption.

Tower Semiconductor Price Performance

Shares of NASDAQ:TSEM opened at $163.06 on Wednesday. The business’s 50 day simple moving average is $210.34 and its 200-day simple moving average is $204.58. The firm has a market capitalization of $18.34 billion, a price-to-earnings ratio of 49.94 and a beta of 0.95. The company has a debt-to-equity ratio of 0.04, a current ratio of 4.91 and a quick ratio of 4.31. Tower Semiconductor has a 12 month low of $80.63 and a 12 month high of $319.94.

Analysts Set New Price Targets

TSEM has been the subject of several analyst reports. National Bank Financial raised shares of Tower Semiconductor to a “buy” rating in a report on Friday, August 7th. Susquehanna lowered their price objective on Tower Semiconductor from $355.00 to $305.00 and set a “positive” rating on the stock in a report on Tuesday. DA Davidson set a $335.00 price objective on Tower Semiconductor in a report on Tuesday. Wedbush dropped their target price on Tower Semiconductor from $300.00 to $190.00 and set a “neutral” rating on the stock in a research report on Tuesday. Finally, Bank of America assumed coverage on Tower Semiconductor in a research note on Friday, August 7th. They set a “buy” rating and a $367.00 target price for the company. One investment analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating and two have given a Hold rating to the stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and an average target price of $297.12.

Insider Activity at Tower Semiconductor

In other Tower Semiconductor news, Director Yoav Chelouche sold 232 shares of the business’s stock in a transaction on Thursday, September 10th. The stock was sold at an average price of $215.06, for a total transaction of $49,893.92. Following the sale, the director directly owned 33,734 shares in the company, valued at approximately $7,254,834.04. The trade was a 0.68% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, CEO Russell Ellwanger sold 104,226 shares of the company’s stock in a transaction on Tuesday, August 11th. The shares were sold at an average price of $248.34, for a total value of $25,883,484.84. Following the completion of the sale, the chief executive officer directly owned 526,788 shares in the company, valued at $130,822,531.92. This trade represents a 16.52% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 181,767 shares of company stock valued at $45,610,065 over the last ninety days. 1.00% of the stock is currently owned by company insiders.

Tower Semiconductor Company Profile

Tower Semiconductor Ltd. is an Israeli specialty semiconductor foundry that manufactures integrated circuits for fabless semiconductor companies, integrated device manufacturers and system companies. The company provides process technologies and production services rather than selling branded end-user electronics.

Its offerings include analog and mixed-signal technologies, radio-frequency and high-voltage circuits, power management solutions, image sensors, and specialty memory products.