Tower Semiconductor (NASDAQ:TSEM) Releases Quarterly Earnings Results, Misses Estimates By $0.02 EPS

Tower Semiconductor (NASDAQ:TSEM) posted its quarterly earnings data on Monday. The semiconductor company reported $1.05 EPS for the quarter, missing the consensus estimate of $1.07 by ($0.02), Zacks reports. The business had revenue of $526.16 million for the quarter, compared to the consensus estimate of $521.83 million. Tower Semiconductor had a return on equity of 9.83% and a net margin of 16.94%. The company’s revenue was up 32.8% on a year-over-year basis. During the same period in the previous year, the firm earned $0.47 EPS.

Here are the key takeaways from Tower Semiconductor’s conference call:

• Record third-quarter results included $526 million in revenue, up 36% year over year, and $120 million in net income, with a 23% net margin. Management guided to approximately $600 million of fourth-quarter revenue, implying roughly $2 billion for full-year 2026.
• Silicon photonics demand is accelerating on AI infrastructure growth. Tower expects year-end SiPho start capacity to be about double the level supporting third-quarter shipments, with signed or advanced customer commitments extending through 2029 and the $920 million expansion expected to achieve a full return on investment within one year.
• Management raised its long-term financial model to $3.6 billion in annual revenue, $1.63 billion in gross profit, and $1.2 billion in net profit, supported by a richer SiPho and SiGe product mix. The company also highlighted opportunities in near-packaged optics, integrated lasers, 3.2-terabit products, and optical circuit switching.
• Capacity expansion is progressing ahead of schedule, but additional depreciation from newly installed tools is expected to reduce incremental gross margins from the unusually high 62% level reported in the quarter toward a long-term 55%–58% range.
• Tower acknowledged increasing competition in silicon photonics and silicon germanium, although executives said customer contracts, high yields, leading-edge technology, and long-term partnerships should help preserve a strong market position. Near-packaged optics adoption remains an opportunity, but its near-term contribution depends on customer and market adoption.

Tower Semiconductor Price Performance

NASDAQ TSEM opened at $155.32 on Tuesday. The company has a market capitalization of $17.47 billion, a PE ratio of 61.39 and a beta of 0.89. The company has a debt-to-equity ratio of 0.04, a quick ratio of 4.31 and a current ratio of 4.91. The business’s fifty day moving average is $211.30 and its 200 day moving average is $204.38. Tower Semiconductor has a fifty-two week low of $80.63 and a fifty-two week high of $319.94.

Insider Transactions at Tower Semiconductor

In other news, CEO Russell Ellwanger sold 104,226 shares of the firm’s stock in a transaction dated Tuesday, August 11th. The stock was sold at an average price of $248.34, for a total value of $25,883,484.84. Following the transaction, the chief executive officer owned 526,788 shares of the company’s stock, valued at $130,822,531.92. This trade represents a 16.52% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, Director Yoav Chelouche sold 232 shares of Tower Semiconductor stock in a transaction dated Thursday, September 10th. The shares were sold at an average price of $215.06, for a total value of $49,893.92. Following the transaction, the director directly owned 33,734 shares in the company, valued at approximately $7,254,834.04. The trade was a 0.68% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last 90 days, insiders sold 181,767 shares of company stock valued at $45,610,065. Company insiders own 1.00% of the company’s stock.

Trending Headlines about Tower Semiconductor

Here are the key news stories impacting Tower Semiconductor this week:

• Positive Sentiment: Third-quarter revenue rose 32.8% year over year to $526.16 million, exceeding the $521.83 million analyst estimate. Earnings were $1.05 per share, up from $0.47 a year earlier, while management described the company as entering a major growth phase. Tower Semiconductor CEO Says the Company’s Biggest Growth Phase Has Arrived
• Positive Sentiment: Management provided strong fourth-quarter revenue guidance, supporting expectations for record growth and approximately $2 billion in annual revenue in 2026. The outlook helped offset concerns about the quarterly earnings miss. Tower Semiconductor Reports Third Quarter Record Results
• Positive Sentiment: Tower is reportedly ahead of schedule on capacity expansion, which could allow it to capture additional demand and improve its ability to sustain revenue growth. Tower Semiconductor Is Ahead of Schedule on Capacity Expansion
• Neutral Sentiment: One valuation analysis estimates that Tower could be 47% undervalued following its record results. However, the shares trade at a high earnings multiple—about 61 times earnings—so future gains depend heavily on the company delivering its projected growth. Tower Semiconductor Could Be 47% Undervalued
• Negative Sentiment: Adjusted EPS of $1.05 fell short of the $1.07 consensus estimate. Although the miss was modest, it appears to have outweighed the revenue beat and strong guidance in the immediate market reaction. Tower Semiconductor Stock Falls Despite Strong Third-Quarter Earnings

Wall Street Analyst Weigh In

TSEM has been the topic of a number of recent research reports. Weiss Ratings cut Tower Semiconductor from a “hold (c)” rating to a “hold (c-)” rating in a research note on Tuesday, August 18th. Mizuho started coverage on shares of Tower Semiconductor in a research note on Friday, September 25th. They set an “outperform” rating and a $300.00 price objective for the company. Bank of America began coverage on shares of Tower Semiconductor in a report on Friday, August 7th. They issued a “buy” rating and a $367.00 target price for the company. UBS Group reiterated a “buy” rating on shares of Tower Semiconductor in a report on Wednesday, July 15th. Finally, Benchmark restated a “buy” rating on shares of Tower Semiconductor in a report on Wednesday, August 5th. One equities research analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating and two have assigned a Hold rating to the company. Based on data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of $316.00.

Tower Semiconductor Company Profile

Tower Semiconductor Ltd. is an Israeli specialty semiconductor foundry that manufactures integrated circuits for fabless semiconductor companies, integrated device manufacturers and system companies. The company provides process technologies and production services rather than selling branded end-user electronics.

Its offerings include analog and mixed-signal technologies, radio-frequency and high-voltage circuits, power management solutions, image sensors, and specialty memory products.