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Tower Semiconductor Ltd. (NASDAQ:TSEM) shareholders are probably feeling a little disappointed, since its shares fell 2.9% to US$44.55 in the week after its latest quarterly results. Tower Semiconductor reported US$371m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.49 beat expectations, being 4.3% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Tower Semiconductor
Taking into account the latest results, the current consensus from Tower Semiconductor's four analysts is for revenues of US$1.57b in 2025. This would reflect a solid 12% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 8.8% to US$2.02. In the lead-up to this report, the analysts had been modelling revenues of US$1.56b and earnings per share (EPS) of US$1.93 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 8.5% to US$57.50. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Tower Semiconductor at US$60.00 per share, while the most bearish prices it at US$50.00. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Tower Semiconductor's rate of growth is expected to accelerate meaningfully, with the forecast 9.8% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 4.1% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 19% per year. 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.