NasdaqGS:TSEM

Stock Analysis Report

Executive Summary

Tower Semiconductor Ltd., an independent semiconductor foundry, manufactures and markets analog intensive mixed-signal semiconductor devices in the United States, Japan, Asia, and Europe.

Rewards

PE ratio (25.1x) is below the Semiconductor industry average (34.5x)

Earnings are forecast to grow 29.67% per year

Risk Analysis

Profit margins (8.5%) are lower than last year (18.4%)

Shareholders have been diluted in the past year



Snowflake Analysis

Flawless balance sheet and fair value.


Similar Companies

Share Price & News

How has Tower Semiconductor's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TSEM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.0%

TSEM

2.5%

US Semiconductor

2.0%

US Market


1 Year Return

77.8%

TSEM

46.4%

US Semiconductor

23.5%

US Market

Return vs Industry: TSEM exceeded the US Semiconductor industry which returned 48.5% over the past year.

Return vs Market: TSEM exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

TSEMIndustryMarket
7 Day1.0%2.5%2.0%
30 Day3.9%5.4%4.3%
90 Day13.1%19.2%12.2%
1 Year77.8%77.8%49.3%46.4%26.1%23.5%
3 Year23.8%23.8%94.6%83.7%53.1%43.2%
5 Year68.5%68.5%152.4%127.6%75.5%56.1%

Price Volatility Vs. Market

How volatile is Tower Semiconductor's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Tower Semiconductor undervalued compared to its fair value and its price relative to the market?

24.78x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TSEM ($25.49) is trading above our estimate of fair value ($22.93)

Significantly Below Fair Value: TSEM is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: TSEM is good value based on its PE Ratio (25.1x) compared to the Semiconductor industry average (34.5x).

PE vs Market: TSEM is poor value based on its PE Ratio (25.1x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: TSEM is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: TSEM is good value based on its PB Ratio (2.1x) compared to the US Semiconductor industry average (3.3x).


Next Steps

Future Growth

How is Tower Semiconductor forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

29.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TSEM's forecast earnings growth (29.7% per year) is above the savings rate (1.7%).

Earnings vs Market: TSEM's earnings (29.7% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TSEM's revenue (5.3% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: TSEM's revenue (5.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if TSEM's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Tower Semiconductor performed over the past 5 years?

36.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TSEM has high quality earnings.

Growing Profit Margin: TSEM's current net profit margins (8.5%) are lower than last year (18.4%).


Past Earnings Growth Analysis

Earnings Trend: TSEM has become profitable over the past 5 years, growing earnings by 36.3% per year.

Accelerating Growth: TSEM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: TSEM had negative earnings growth (-56.1%) over the past year, making it difficult to compare to the Semiconductor industry average (-15.8%).


Return on Equity

High ROE: TSEM's Return on Equity (7.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Tower Semiconductor's financial position?


Financial Position Analysis

Short Term Liabilities: TSEM's short term assets ($1.1B) exceed its short term liabilities ($234.7M).

Long Term Liabilities: TSEM's short term assets ($1.1B) exceed its long term liabilities ($346.9M).


Debt to Equity History and Analysis

Debt Level: TSEM's debt to equity ratio (21.4%) is considered satisfactory.

Reducing Debt: TSEM's debt to equity ratio has reduced from 224.5% to 21.4% over the past 5 years.

Debt Coverage: TSEM's debt is well covered by operating cash flow (110.1%).

Interest Coverage: TSEM earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: TSEM has a high level of physical assets or inventory.

Debt Coverage by Assets: TSEM's debt is covered by short term assets (assets are 3.7x debt).


Next Steps

Dividend

What is Tower Semiconductor's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage2.0%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate TSEM's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate TSEM's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if TSEM's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TSEM's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TSEM's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Tower Semiconductor's salary, the management and board of directors tenure and is there insider trading?

9.8yrs

Average management tenure


CEO

Russell Ellwanger (64yo)

14.7yrs

Tenure

0

Mr. Russell C. Ellwanger has been the Chief Executive Officer of Tower Semiconductor Ltd., since May 1, 2005. Mr. Ellwanger has been the Chief Executive Officer at Tower US Holdings Inc. since May 2002. He ...


Management Age and Tenure

9.8yrs

Average Tenure

53.5yo

Average Age

Experienced Management: TSEM's management team is seasoned and experienced (9.8 years average tenure).


Board Age and Tenure

10.9yrs

Average Tenure

64yo

Average Age

Experienced Board: TSEM's board of directors are seasoned and experienced ( 10.9 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 6.7%.


Management Team

  • Avi Strum (57yo)

    Senior VP & General Manager of Sensors Business Unit

    • Tenure: 15yrs
  • Itzhak Edrei (60yo)

    President

    • Tenure: 8.2yrs
  • Rafi Mor (55yo)

    Chief Operating Officer

    • Tenure: 5.4yrs
  • Oren Shirazi (49yo)

    CFO & Senior VP of Finance

    • Tenure: 15.2yrs
  • Russell Ellwanger (64yo)

    CEO & Director

    • Tenure: 14.7yrs
  • Nati Somekh (44yo)

    Senior VP

    • Tenure: 11.3yrs
  • Dalit Dahan (51yo)

    Senior Vice President of Human Resources & Information Technology

    • Marco Racanelli (52yo)

      SVP & GM of Analog IC Business Unit and Newport Beach Site Manager

      • Tenure: 7.6yrs
    • Yossi Netzer (55yo)

      Senior Vice President of Corporate Planning

      • Tenure: 7.5yrs
    • Noit Levi-Karoubi (35yo)

      Vice President of Investor Relations & Corporate Communications


      Board Members

      • Jerry Neal (74yo)

        Independent Director

        • Tenure: 1.5yrs
      • Yoav Chelouche (64yo)

        Independent Director

        • Tenure: 3.8yrs
      • Amir Elstein (63yo)

        Independent Chairman of the Board

        • Tenure: 11yrs
      • Dana Gross (52yo)

        Independent Director

        • Tenure: 11.2yrs
      • Rami Guzman (80yo)

        Independent Director

        • Tenure: 10.9yrs
      • Russell Ellwanger (64yo)

        CEO & Director

        • Tenure: 14.7yrs
      • Kalman Kaufman (74yo)

        Independent Director

        • Tenure: 14.4yrs
      • Alex Kornhauser (73yo)

        Independent Director

        • Tenure: 11.4yrs
      • Ilan Flato (63yo)

        Independent Director

        • Tenure: 10.8yrs
      • Iris Avner (54yo)

        Independent Director

        Company Information

        Tower Semiconductor Ltd.'s company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Tower Semiconductor Ltd.
        • Ticker: TSEM
        • Exchange: NasdaqGS
        • Founded: 1993
        • Industry: Semiconductors
        • Sector: Semiconductors
        • Market Cap: US$2.719b
        • Shares outstanding: 106.43m
        • Website: https://www.towerjazz.com

        Location

        • Tower Semiconductor Ltd.
        • Ramat Gavriel Industrial Park
        • 20 Shaul Amor Avenue
        • Migdal Haemek
        • 2310502
        • Israel

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        TSEMNasdaqGS (Nasdaq Global Select)YesOrdinary SharesUSUSDOct 1994
        TOWDB (Deutsche Boerse AG)YesOrdinary SharesDEEUROct 1994
        TSEMTASE (The Tel-Aviv Stock Exchange)YesOrdinary SharesILILSOct 1994

        Biography

        Tower Semiconductor Ltd., an independent semiconductor foundry, manufactures and markets analog intensive mixed-signal semiconductor devices in the United States, Japan, Asia, and Europe. It provides various customizable process technologies, including SiGe, BiCMOS, mixed-signal/CMOS, RF CMOS, CMOS image sensor, integrated power management, and MEMS. The company also offers transfer optimization and development process services to integrated device manufacturers and fabless companies. It serves various markets, such as automotive, medical and dental, professional photography, industrial and machine vision, AR and 3D gesture control, security, space and scientific, projectors and display, consumer, aerospace and defense, computers and servers, as well as Internet of Things; timing controllers; digital, mixed-signal/CMOS & RFCMOS; and display driver IC. The company was founded in 1993 and is headquartered in Migdal Haemek, Israel. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/17 23:45
        End of Day Share Price2020/01/17 00:00
        Earnings2019/09/30
        Annual Earnings2018/12/31


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.