Israel's Tower Semi Q3 revenue growth of 33% tops estimates, sees faster Q4 growth

Overview

• Israel analog semiconductor foundry's Q3 revenue rose 33% yr/yr, beating analyst expectations

• Adjusted EPS for Q3 was $1.05; net profit more than doubled from prior year

• Company guides Q4 revenue to $600 mln, up 36% yr/yr

Outlook

• Company expects Q4 2026 revenue of $600 mln, plus or minus 5%

• Tower targets to close 2026 at $2 bln annual revenue and $2.4 bln annualized run rate

• Company expects to avoid typical Q1 industry seasonality in 2027, with sequential revenue and margin growth

Result Drivers

• HIGH-SPEED CONNECTIVITY DEMAND - Co said exceptional growth in high-speed connectivity business was driven by strong infrastructure (SiPho and SiGe) demand

• CAPACITY INVESTMENTS - Co said ongoing capacity investments, including Track-1 Japan 300mm buildout, are progressing ahead of schedule and supported by extended customer contracts

• SIPHO REVENUE SURGE - Co targets annualized $1.1 bln run rate in Q4 for SiPho revenue, 5X of 2025 SiPho annual revenue

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the semiconductors peer group is "buy"

• Wall Street's median 12-month price target for Tower Semiconductor Ltd. is $310.00, about 86.2% above its October 30 closing price of $166.48

• The stock recently traded at 26 times the next 12-month earnings vs. a P/E of 46 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)