Tower Semiconductor Shares Fall on Q2 Revenue Decline: Details

Tower Semiconductor Ltd TSEM reported a fiscal second-quarter 2024 revenue decline of 1.7% year-on-year to $351.2 million, beating the analyst consensus estimate of $350.1 million.

The Israel-based contract chipmaker's adjusted EPS of $0.53 beat the analyst consensus estimate of $0.45.

Gross profit was $86.9 million, up 0.5% Y/Y. The margin improved by 53 bps to 24.8%. Operating profit of $55.1 million climbed 9% Y/Y.

The company generated $113 million in operating cash flow and held $1.23 billion in cash and equivalents as of June-end.

Outlook: Tower Semiconductor expects third-quarter revenue of $370 million, with an upward or downward range of 5% versus the $369.9 million consensus.

Tower Semiconductor has been asked by the Indian government to revise its chip fabrication unit proposal to include a technology partner offering advanced nodes for manufacturing, Economic Times reported in May.

The government prefers Tower Semiconductor to focus on 28 nm, 40 nm, 55 nm, and 65 nm nodes instead of just the proposed 180 nm node plan.

Tower Semiconductor has submitted an $8-10 billion proposal for a unit in India, potentially making it one of their largest, but faces legal challenges following the fallout with joint venture partner Next Orbit Ventures.

Tower Semiconductor stock gained 18% in the last 12 months.

TSEM Stock Prediction 2024

Equity research can be a valuable source of information for learning about a company's fundamentals. Analysts create financial models based on the fundamentals and expected future earnings of a company to arrive at a price target and recommendation for the stock.

Shares of Tower Semiconductor have an average 1-year price target of $49.67, representing an expected upside of 20.31%.

Because of differences in assumptions, analysts can arrive at very different price targets and recommendations. No analysts have bearish recommendations on Tower Semiconductor, while 3 analysts have bullish ratings. The street high price target from Susquehanna is $55.0, while the street low from Craig-Hallum is $44.0.

TSEM Price Action: Tower Semiconductor shares traded lower by 2.46% at $40.27 premarket at the last check Wednesday. 

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