Tower Semiconductor Ltd.
Tower Semiconductor Ltd. Fundamental Analysis
Tower Semiconductor Ltd. (TSEM) shows weak financial fundamentals with a PE ratio of 65.11, profit margin of 14.08%, and ROE of 7.86%. The company generates $1.5B in annual revenue with weak year-over-year growth of 0.94%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 48.2/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze TSEM's fundamental strength across five key dimensions:
Efficiency Score
WeakTSEM struggles to generate sufficient returns from assets.
Valuation Score
WeakTSEM trades at a premium to fair value.
Growth Score
WeakTSEM faces weak or negative growth trends.
Financial Health Score
ExcellentTSEM maintains a strong and stable balance sheet.
Profitability Score
WeakTSEM struggles to sustain strong margins.
Key Financial Metrics
Is TSEM Expensive or Cheap?
P/E Ratio
TSEM trades at 65.11 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, TSEM's PEG of 5.18 indicates potential overvaluation.
Price to Book
The market values Tower Semiconductor Ltd. at 4.94 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 27.05 times EBITDA. This signals the market has high growth expectations.
How Well Does TSEM Make Money?
Net Profit Margin
For every $100 in sales, Tower Semiconductor Ltd. keeps $14.08 as profit after all expenses.
Operating Margin
Core operations generate 12.40 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $7.86 in profit for every $100 of shareholder equity.
ROA
Tower Semiconductor Ltd. generates $6.64 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Tower Semiconductor Ltd. generates strong operating cash flow of $393.62M, reflecting robust business health.
Free Cash Flow
Tower Semiconductor Ltd. generates weak or negative free cash flow of $-43.90M, restricting financial flexibility.
FCF Per Share
Each share generates $-0.39 in free cash annually.
FCF Yield
TSEM converts -0.32% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
65.11
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
5.18
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.94
vs 25 benchmark
P/S Ratio
Price to sales ratio
8.95
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.06
vs 25 benchmark
Current Ratio
Current assets to current liabilities
6.48
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.08
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.06
vs 25 benchmark
How TSEM Stacks Against Its Sector Peers
| Metric | TSEM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 65.11 | 34.79 | Worse (Expensive) |
| ROE | 7.86% | 1185.00% | Weak |
| Net Margin | 14.08% | -133093.00% (disorted) | Strong |
| Debt/Equity | 0.06 | 0.43 | Strong (Low Leverage) |
| Current Ratio | 6.48 | 4.90 | Strong Liquidity |
| ROA | 6.64% | -324805.00% (disorted) | Weak |
TSEM outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Tower Semiconductor Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
11.25%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
120.67%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
47.23%
Industry Style: Growth, Innovation, High Beta
High Growth