Upside case
Bull case
$515+137.4%
TSEM would need investors to value it at roughly 172x earnings — about 100x more generous than today's 72x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewBuyUpdated May 1, 2026
Tower Semiconductor Ltd. (TSEM) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Buy
Covering
14
analysts
10 bullish · 0 bearish · 14 covering TSEM
Strong Buy
0
Buy
10
Hold
4
Sell
0
Strong Sell
0
Consensus Target
$154
-29.0% vs today
Scenario Range
$61 – $515
Model bear to bull value window
Coverage
14
Published analyst ratings
Valuation Context
72.5x
Forward P/E · Market cap $24.4B
TSEM price targets
Three scenarios for where TSEM stock could go
Current
~$217
Confidence
53 / 100
Updated
May 1, 2026
Where we are now
Current · $217
Bear
$61
Base
$217
Bull
$515
Market caseClosest to today
Base case
$217+0.0%
This is close to how the market is already pricing TSEM — at roughly 72x forward earnings. No dramatic re-rating needed, just steady execution on the core business.
Stress case
Bear case
$61-71.9%
If investor confidence fades or macro conditions deteriorate, a 52x multiple contraction could push TSEM down roughly 72% from where it trades now.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Tower Semiconductor Ltd.
TSEM · NASDAQTechnologySemiconductorsDecember year-end
Tower Semiconductor is an independent specialty semiconductor foundry that manufactures analog-intensive mixed-signal chips for customers who design but don't fabricate their own semiconductors. It generates revenue primarily from wafer fabrication services—charging customers for manufacturing their chip designs—with additional income from design enablement and process development services. The company's competitive advantage lies in its specialized expertise in analog and mixed-signal technologies—a niche where larger foundries often don't compete—and its long-term partnerships with customers in automotive, industrial, and medical markets.
Market Cap
$24.4B
Revenue TTM
$1.6B
Net Income TTM
$220M
Net Margin
14.1%
TSEM Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
83%Exceptional
12 quarters tracked
Revenue Beat Rate
67%Exceptional
vs consensus estimates
Avg EPS Surprise
+6.9%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q2 2025
Q3 2025
Q4 2025
Q1 2026
Last 4 Quarters
EPS beats: 4 of 4Q2 2025
EPS
$0.45/$0.38
Revenue
$358M/$358M
Q3 2025
EPS
$0.50/$0.47
Revenue
$372M/$395M
Q4 2025
EPS
$0.55/$0.54
Revenue
$396M/$395M
Q1 2026
EPS
$0.78/$0.67
Revenue
$440M/$440M
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q2 2025 | $0.45/$0.38 | +18.8% | $358M/$358M | +0.0% |
| Q3 2025 | $0.50/$0.47 | +6.4% | $372M/$395M | -5.8% |
| Q4 2025 | $0.55/$0.54 | +1.3% | $396M/$395M | +0.2% |
| Q1 2026 | $0.78/$0.67 | +16.4% | $440M/$440M | +0.1% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$1.7B
+6.9% YoY
FY2
$1.8B
+8.5% YoY
EPS Outlook
FY1
$2.27
+17.5% YoY
FY2
$2.72
+19.8% YoY
Trailing FCF (TTM)-$41M
FCF Margin: -2.6%
Next Earnings
May 13, 2026
Expected EPS
$0.56
Expected Revenue
$411M
TSEM beat EPS estimates in 4 of 4 tracked quarters. A perfect track record raises the bar for the upcoming report.
TSEM Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Significantly Overvalued
Fair value est. $71 — implies -67.4% from today's price.
Premium to Fair Value
67.4%
above fair value
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
TSEM
111.8x
vs
S&P 500
25.2x
+343% premium
vs Technology Trailing P/E
TSEM
111.8x
vs
Technology
27.5x
+307% premium
vs TSEM 5Y Avg P/E
Today
111.8x
vs
5Y Average
28.4x
+294% premium
Forward PE
72.5x
S&P 500
19.1x
+280%
Technology
21.7x
+234%
5Y Avg
—
—
Trailing PE
111.8x
S&P 500
25.2x
+343%
Technology
27.5x
+307%
5Y Avg
28.4x
+294%
PEG Ratio
5.42x
S&P 500
1.75x
+211%
Technology
1.47x
+270%
5Y Avg
—
—
EV/EBITDA
48.9x
S&P 500
15.3x
+221%
Technology
17.4x
+181%
5Y Avg
12.3x
+299%
Price/FCF
—
S&P 500
21.3x
—
Technology
19.8x
—
5Y Avg
28.1x
—
Price/Sales
15.6x
S&P 500
3.1x
+397%
Technology
2.4x
+545%
5Y Avg
4.1x
+277%
Dividend Yield
—
S&P 500
1.88%
—
Technology
1.18%
—
5Y Avg
—
—
| Metric | TSEM | S&P 500 | Technology | 5Y Avg TSEM |
|---|---|---|---|---|
| Forward PE | 72.5x | 19.1x+280% | 21.7x+234% | — |
| Trailing PE | 111.8x | 25.2x+343% | 27.5x+307% | 28.4x+294% |
| PEG Ratio | 5.42x | 1.75x+211% | 1.47x+270% | — |
| EV/EBITDA | 48.9x | 15.3x+221% | 17.4x+181% | 12.3x+299% |
| Price/FCF | — | 21.3x | 19.8x | 28.1x |
| Price/Sales | 15.6x | 3.1x+397% | 2.4x+545% | 4.1x+277% |
| Dividend Yield | — | 1.88% | 1.18% | — |
TSEM trades above S&P 500 benchmarks on 5 of 5 measured multiples — commands a broad premium across most valuation dimensions.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolTSEM Financial Health
Verdict
Adequate
Key financial metrics for TSEM are shown below.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$1.6B
Revenue Growth
TTM vs prior year
+9.1%
Gross Margin
Gross profit as a share of revenue
23.2%
Operating Margin
Operating income divided by revenue
12.4%
Net Margin
Net income divided by revenue
14.1%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$1.93
Free Cash Flow (TTM)
Cash generation after capex
-$41M
FCF Margin
FCF as share of revenue — the primary cash quality signal
-2.6%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
5.4%
ROA
Return on assets, trailing twelve months
6.6%
Cash & Equivalents
Liquid assets on the balance sheet
$235M
Net Cash
Cash exceeds total debt — no net leverage
$74M
Debt Serviceability
Net debt as a multiple of annual free cash flow
Net cash ✓
ROE
Return on equity, trailing twelve months
7.6%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
0.0%
Dividend
—
Buyback
0.0%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$0
Dividend / Share
Annualized trailing dividend per share
—
Payout Ratio
Share of earnings distributed as dividends
—
Shares Outstanding
Current diluted share count
114M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageTSEM Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 29, 2026
High Risk
Elevated Valuation
TSEM's stock has surged significantly, raising concerns about its valuation being stretched. Analysts suggest it is overvalued, with its forward PE ratio considerably higher than its five-year average, indicating potential for a price correction.
High Risk
Customer Concentration
Tower Semiconductor relies heavily on a small number of key customers, with its top customer contributing a substantial portion of revenue. This concentration exposes the company to risks associated with changes in demand or business decisions from these major clients.
High Risk
Geopolitical Instability
Prolonged geopolitical events, such as the ongoing war in Iran, could lead to adverse economic effects, including elevated oil prices. Such instability can negatively impact the broader market and risk assets like TSEM.
Medium
Cyclical Demand
The company's performance is closely tied to the cyclical demand for electronic devices in its customers' end markets. Fluctuations in this demand can lead to significant revenue volatility and impact financial stability.
Medium
Failed Execution
There is a risk of failed execution in TSEM's strategic plans and capacity expansions. Any missteps in these areas could hinder growth and negatively affect investor confidence.
Medium
Product Yield and Quality
Uncertainty in advanced technologies presents challenges in achieving expected product quality and yield. This could result in revenue loss and damage customer trust, impacting long-term relationships.
Lower
Liquidity Constraints
While structural liquidity tightness has provided some price floor support, the limited tradable supply could lead to sharp re-ratings if buying pressure increases significantly. This could create volatility in the stock price.
Lower
Legal and Regulatory Risks
Changes in tax regulations and other legal or regulatory measures could adversely impact TSEM's business operations. Such risks may lead to increased compliance costs and potential financial penalties.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why TSEM Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 29, 2026
Dominance in Silicon Photonics (SiPho)
Tower Semiconductor is a dominant player in AI photonics, operating the only production-grade silicon photonics (SiPho) Process Design Kit (PDK) globally. This unique position makes it a critical partner for major semiconductor companies that rely on TSEM for fabricating their photonics chips.
AI and Data Center Growth
The company is well-positioned to benefit from the increasing demand for AI infrastructure and data center expansion. Its technology is crucial for high-speed optical transceivers and modulators used in AI networking.
Capacity Expansion
TSEM is undertaking a significant capital expenditure plan, including a $920 million investment to quintuple its SiPho production capacity. This expansion is crucial to meet the projected demand and solidify its market leadership.
Strong Customer Relationships and Partnerships
Tower Semiconductor has established strategic partnerships with key players in the AI and quantum computing sectors, such as NVIDIA and Xanadu. These collaborations integrate TSEM's manufacturing into advanced systems, creating high switching costs for customers.
Revenue and Earnings Growth
Analysts forecast significant earnings growth for TSEM, with projections of 38% per year and a 70% year-over-year increase in SiPho revenue. Revenue is projected to reach $2.8 billion by 2029, with earnings around $732.5 million.
Limited Float and Price Stability
The company has a structurally tight float of shares, with a significant portion locked in foreign pensions. This limited liquidity has historically created a strong price floor, with minimal downside observed during broader sector declines.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
TSEM Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$216.87
52W Range Position
92%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$35.42
+512.3% from the low
52-Week High
$232.67
-6.8% from the high
1 Month
+14.03%
3 Month
+55.98%
YTD
+78.1%
1 Year
+504.8%
3Y CAGR
+71.8%
5Y CAGR
+50.8%
10Y CAGR
+33.8%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
TSEM vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
72.5x
vs 37.7x median
+92% above peer median
Revenue Growth
+6.9%
vs +0.1% median
+9174% above peer median
Net Margin
14.1%
vs 9.5% median
+49% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
TSE TSEM Tower Semiconductor Ltd. | $24.4B | 72.5x | +6.9% | 14.1% | Buy | -29.0% |
GFS GFS GLOBALFOUNDRIES Inc. | $40.2B | 39.2x | +2.9% | 13.0% | Buy | -29.3% |
UMC UMC United Microelectronics Corporation | $38.0B | 22.3x | -13.8% | 20.8% | Hold | -43.5% |
INT INTC Intel Corporation | $567.4B | 108.4x | +3.9% | -5.9% | Hold | -31.7% |
ON ON ON Semiconductor Corporation | $41.5B | 36.1x | -1.1% | 9.5% | Buy | -41.0% |
WOL WOLF Wolfspeed, Inc. | $1.9B | — | +0.1% | -233.9% | Hold | -53.5% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
TSEM Dividend and Capital Return
TSEM does not currently return meaningful capital to shareholders.
Dividend UnknownFCF Unknown
Total Shareholder Yield
0.0%
Dividend + buyback return per year
Buyback Yield
0.0%
Dividend Yield
—
Payout Ratio
—
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$0.00
Growth Streak
Consecutive years of dividend increases
2Y
3Y Div CAGR
—
5Y Div CAGR
—
Ex-Dividend Date
—
Payment Cadence
Annual
0 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$0
Estimated Shares Retired
0
Approx. Share Reduction
0.0%
Shares Outstanding
Current diluted share count from the screening snapshot
114M
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 1997 | $15.00 | -32.7% | 0.0% | 9.4% |
| 1996 | $22.28 | — | 0.1% | 14.3% |
FAQ
7 questionsTSEM Investor Questions
Common questions answered from live analyst data and company financials.
01Is Tower Semiconductor Ltd. (TSEM) stock a buy or sell in 2026?
Tower Semiconductor Ltd. (TSEM) is rated Buy by Wall Street analysts as of 2026. Of 14 analysts covering the stock, 10 rate it Buy or Strong Buy, 4 rate it Hold, and 0 rate it Sell or Strong Sell. The consensus 12-month price target is $154, implying -29.0% from the current price of $217. The bear case scenario is $61 and the bull case is $515.
02What is the TSEM stock price target for 2026?
The Wall Street consensus price target for TSEM is $154 based on 14 analyst estimates. The high-end target is $180 (-17.0% from today), and the low-end target is $140 (-35.4%). The base case model target is $217.
03Is Tower Semiconductor Ltd. (TSEM) stock overvalued in 2026?
TSEM trades at 72.5x times forward earnings. The stock trades at a notable premium to the broad market, which is typical for businesses with strong free cash flow and above-average growth expectations. Based on current multiples versus the peer group, the relative model signals significantly overvalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Tower Semiconductor Ltd. (TSEM) stock in 2026?
The primary risks for TSEM in 2026 are: (1) Elevated Valuation — TSEM's stock has surged significantly, raising concerns about its valuation being stretched. (2) Customer Concentration — Tower Semiconductor relies heavily on a small number of key customers, with its top customer contributing a substantial portion of revenue. (3) Geopolitical Instability — Prolonged geopolitical events, such as the ongoing war in Iran, could lead to adverse economic effects, including elevated oil prices. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Tower Semiconductor Ltd.'s revenue and earnings forecast?
Analyst consensus estimates TSEM will report consensus revenue of $1.7B (+6.9% year-over-year) and EPS of $2.27 (+17.5% year-over-year) for the upcoming fiscal year. The following year, analysts project $1.8B in revenue.
06When does Tower Semiconductor Ltd. (TSEM) report its next earnings?
Tower Semiconductor Ltd. is expected to report its next earnings on approximately 2026-05-13. Consensus expects EPS of $0.56 and revenue of $411M. Over recent quarters, TSEM has beaten EPS estimates 83% of the time.
07How much free cash flow does Tower Semiconductor Ltd. generate?
Tower Semiconductor Ltd. (TSEM) had a free cash outflow of $41M in free cash flow over the trailing twelve months — a free cash flow margin of 2.6%. TSEM returns capital to shareholders through and share repurchases ($0 TTM).