Tower Semiconductor Ltd. (NASDAQ:TSEM) Just Released Its Annual Results And Analysts Are Updating Their Estimates

Shareholders might have noticed that Tower Semiconductor Ltd. (NASDAQ:TSEM) filed its full-year result this time last week. The early response was not positive, with shares down 9.3% to US$45.53 in the past week. Results were roughly in line with estimates, with revenues of US$1.4b and statutory earnings per share of US$1.85. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Tower Semiconductor

After the latest results, the six analysts covering Tower Semiconductor are now predicting revenues of US$1.57b in 2025. If met, this would reflect a notable 9.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to reduce 2.2% to US$1.82 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.58b and earnings per share (EPS) of US$2.04 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

The consensus price target held steady at US$56.77, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Tower Semiconductor analyst has a price target of US$60.00 per share, while the most pessimistic values it at US$48.10. This is a very narrow spread of estimates, implying either that Tower Semiconductor is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Tower Semiconductor's growth to accelerate, with the forecast 9.2% annualised growth to the end of 2025 ranking favourably alongside historical growth of 3.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 17% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Tower Semiconductor is expected to grow slower than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Tower Semiconductor. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$56.77, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Tower Semiconductor going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Tower Semiconductor , and understanding this should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.