New Data Centers And Manufacturing Sites Will Secure Lasting Demand

Key Takeaways

• Demand for advanced PCBs from AI, cloud, and defense markets, plus domestic sourcing trends, strengthens TTM's growth, customer ties, and revenue stability.
  
• Expansion into engineered solutions, automation, and disciplined operations enhances pricing power, margins, and cash flow resilience.
  
• High operating costs, persistent customer concentration, geopolitical exposure, and capital-intensive expansions create significant margin, revenue, and execution risks for future profitability.

Catalysts

Manufactures and sells mission systems, radio frequency (RF) components and RF microwave/microelectronic assemblies, and printed circuit boards (PCB) in the United States, Taiwan, and internationally.

• Large-scale data center buildouts announced by tech giants (e.g., Google, CoreWeave, Meta) and TTM's new Wisconsin facility position the company to capture outsized demand for advanced PCBs and interconnects required for AI and cloud infrastructure, directly supporting revenue growth and long-term customer relationships.
  
• Sustained increases in U.S. and NATO defense spending plans, alongside TTM's deep strategic alignment and $1.46 billion A&D backlog, provide long-term visibility and stability for high-margin revenue streams, improving predictability of forward earnings and supporting ongoing margin expansion.
  
• Ongoing expansion into higher-value engineered solutions and advanced manufacturing capabilities-particularly through new capacity in Penang, Syracuse, and product mix shifts-increases pricing power and drives gross margin improvements over time, enhancing net margin profile.
  
• Growing industry-wide emphasis on supply chain resiliency and secure domestic sourcing is likely to shift PCB market share toward North American providers like TTM, potentially leading to persistent outperformance in revenue and free cash flow as customers prioritize domestic production.
  
• TTM's operational footprint rationalization, including automation in new U.S. and Malaysian locations, and disciplined strategic focus, positions the company to both manage costs efficiently and respond rapidly to demand surges, underpinning robust future earnings and cash flow generation.

TTM Technologies Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming TTM Technologies's revenue will grow by 6.4% annually over the next 3 years.
• Analysts assume that profit margins will increase from 3.5% today to 7.9% in 3 years time.
• Analysts expect earnings to reach $251.1 million (and earnings per share of $1.84) by about August 2028, up from $93.2 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 31.0x on those 2028 earnings, down from 47.9x today. This future PE is greater than the current PE for the US Electronic industry at 22.6x.
• Analysts expect the number of shares outstanding to grow by 1.34% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.68%, as per the Simply Wall St company report.

TTM Technologies Future Earnings Per Share Growth

Risks

• The company's Penang facility in Malaysia is experiencing slower-than-expected revenue ramp-up due to operational "growing pains" and longer customer qualification cycles, resulting in ongoing margin drag (210 basis points on operating margin), which could negatively impact both near-term and long-term net margins and earnings if not resolved promptly.
  
• New domestic U.S. manufacturing initiatives (such as the Wisconsin facility) carry significantly higher operating costs (estimated at least 50% above China), and require explicit long-term customer commitments at substantially higher pricing; any lack of such demand could leave TTM with underutilized, costly assets, leading to pressure on gross margin and lower free cash flow.
  
• The company maintains notable customer concentration, with the top 5 customers forming 41% of total sales and one customer exceeding 10%; any loss or reduction of business from these key clients would expose TTM to meaningful revenue volatility and potential earnings downside.
  
• Although TTM has diversified its global manufacturing presence, it retains significant capacity and expansion in China (Dongguan and Guangzhou), which leaves the company exposed to ongoing and potentially escalating U.S.–China geopolitical tensions, risking supply chain disruption and increased input costs that could depress future profitability.
  
• The ongoing requirement for high capital expenditures (for facility buildouts and capacity expansions in Malaysia, New York, and Wisconsin) amid a changing product mix, coupled with the potential for inertia or missteps in moving up the advanced technology PCB value chain, could constrain margin expansion and result in lower return on invested capital if execution lags or new markets fail to scale as anticipated.

Valuation

• The analysts have a consensus price target of $56.75 for TTM Technologies based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $3.2 billion, earnings will come to $251.1 million, and it would be trading on a PE ratio of 31.0x, assuming you use a discount rate of 8.7%.
  
• Given the current share price of $43.21, the analyst price target of $56.75 is 23.9% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.