Tower Semiconductor Ltd.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Tower Semiconductor's revenue acceleration to 23.7% YoY in Q2 2026 and consistent double-digit EPS beats (actual $0.88 vs. estimated $0.758) confirm a genuine operational turnaround, supported by AI-infrastructure catalysts like the NewPhotonics high-volume silicon photonics shipments announced September 17, 2026.
However, the stock's 90.4x trailing P/E — a 121% premium to the peer median of 40.9x — prices in sustained perfection while FY2025 free cash flow remained negative at approximately -$41M and 24-month net insider selling totaled approximately -$60M with the CEO selling shares as recently as August 11, 2026. Hold: the improving trajectory deserves respect, but the margin of safety is thin at $228.71 with gross margin still compressed at 23.2% versus 27.8% in 2022.
What could go wrong
- Valuation compression. At 90.4x P/E and 15.3x P/S, TSEM trades at a 121% and 87% premium to peer medians respectively; any deceleration in revenue growth could trigger a sharp de-rating.
- Persistent insider selling. Over 24 months, insiders net sold 248,731 shares for approximately -$60M with zero acquisitions; CEO Russell Ellwanger sold shares as recently as August 11, 2026 at prices between $243-$254.
- Negative free cash flow. FY2025 FCF was approximately -$41M against capex of $436.6M; if capex remains elevated without proportional revenue scaling, cash generation will lag the growth narrative.
- Margin pressure. Gross margin declined to 23.2% in FY2025 from 27.8% in FY2022, and operating margin fell to 12.4% from 38.5% in FY2023, indicating the revenue mix or utilization is not yet translating to peak profitability.
What would change my mind
Where this comes from: results, quarter to 30 Jun · earnings vs estimates, 4 Aug · peer comparison · fundamentals, year to 31 Dec 2025. Orin's read on TSEM; not advice.
How has the share price moved?
Up 139% over twelve months, from $79.00 on 27 Oct 2025 to $189.08 at the Tue 27 Oct 2026 close. Its highest close in that time was $316.85 on 22 Jun 2026; the last close is 40.3% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 9.4M, on 18 Sep 2026).
- Rose flags: large share sales by the company's own officers and directors, from the Form 4 each one files after trading.
On file
All TSEM filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| T. Rowe Price Associates | $1.8B | 0.2% |
| BlackRock | $857.5M | 0.0% |
| Vanguard Capital Management | $814.9M | 0.0% |
| Capital World Investors | $353.3M | 0.0% |
| Invesco | $348.4M | 0.0% |
| Vanguard Fiduciary Trust | $259.1M | 0.1% |
| FMR | $239.7M | 0.0% |
| Millennium Management | $221.7M | 0.1% |
| Norges Bank | $198.3M | 0.0% |
| Goldman Sachs Group | $188.2M | 0.0% |
70 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 48 Form 4 filings; open-market trades net −$60.0M. Of the 48 on hand, 0 were open-market purchases and 38 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about TSEM
Orin answers questions about TSEM from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 71.6× its last 12 months of profit (Tue 27 Oct close); the typical Technology company on the NASDAQ is at 46.1×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 71.6× | — | 46.1× |
| P/S | 12.2×above usual | 2.85× | — |
| EV/EBITDA | 36.5× | — | — |
| P/B | 6.7×above usual | 2.5× | — |
- P/E: no usual level — it ran from 6.5× to 60.5× over its last 5 fiscal years, so a middle value says little.
- EV/EBITDA: no usual level — it ran from 3.9× to 24.4× over its last 5 fiscal years, so a middle value says little.
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $302 (from $270 to $330) — 60% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$302
$270 – $330 · +60% against the last close
- 2 buy or overweight
- 2 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 71.6× its last 12 months of profit; the middle P/E of the 8 companies it is compared to that made a profit is 35.4×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| TSEMTower Semiconductor Ltd. | $21B | 71.6× | 36.5× | 26.9% | 16.9% | 10% |
| AMKRAmkor Technology, Inc. | $10B | 16.0× | 7.3× | 16.6% | 8.3% | 13% |
| LSCCLattice Semiconductor Corporation | $15B | 391× | 165× | 67.7% | 5.6% | 5% |
| MKSIMKS Inc. | $12B | 19.8× | 12.6× | 44.7% | 12.6% | 20% |
| NVMINova Ltd. | $9B | 34.7× | 31.1× | 57.1% | 28.8% | 20% |
| ONTOOnto Innovation Inc. | $11B | 79.9× | 43.2× | 50.4% | 11.8% | 7% |
| QRVOQorvo, Inc. | $10B | 26.2× | 13.2× | 48.2% | 11.0% | 11% |
| RMBSRambus Inc. | $10B | 36.1× | 26.4× | 79.1% | 33.4% | 19% |
| SWKSSkyworks Solutions, Inc. | $13B | 44.1× | 16.1× | 40.7% | 7.2% | 5% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 71.6× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now71.6×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Technology companies on the NASDAQ were priced at a typical 46.1× their yearly profit (Tue 27 Oct close).
- Now46.1×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $23 a share — 88% below the $189.19 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $23 | 88% below $189.19 |
| Levered | $16 | 92% below $189.19 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.