What Are The Risk Factors For Tower Semiconductor Ltd. (TSEM)?


As of Wednesday close, Tower Semiconductor Ltd.’s (NASDAQ:TSEM) stock was up $0.46, moving up 1.06 percent to $43.96. The average number of shares traded per day over the past five days has been 292,060 shares. 4 times new highs have been achieved over the past 5 days, with a $1.44 gain in that time frame. In the last twenty days, the average volume was 588,075, while in the previous 50 days, it was 489,216.

Since last month, TSEM stock rose 3.48%. Shares of the company fell to $39.73 on 11/04/22, the lowest level in the past month. A 52-week high of $49.13 was reached on 05/04/22 after having rallying from a 52-week low of $31.04. Since the beginning of this year, TSEM’s stock price has risen by 10.79% or $4.28, and marked a new high 9 times. However, the stock has declined by -10.52% since its 52-week high.

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Valuation Metrics

Right now, Tower Semiconductor Ltd. (TSEM) has a P/E ratio of about 20.86. The stock’s beta is 0.96. Besides these, the trailing price-to-sales (P/S) ratio of 2.84, the price-to-book (PB) ratio of 2.74, and the price-to-cash flow ratio of 20.38 may also be considered.

Financial Health

In the three months ended June 29, Tower Semiconductor Ltd.’s quick ratio stood at 3.00, while its current ratio was 3.80, showing that the company is able to pay off its debt. According to company report, the long-term debt-to-equity ratio for the quarter ending June 29 was 0.12, and the total debt-to-equity ratio was 0.15. On the profitability front, the trailing twelve-month gross margin is 26.20% percent. In the year ended June 29, operating margins totaled 15.90%. Based on annual data, TSEM earned $329.12 million in gross profit and brought in $1.51 billion in revenue.

A company’s management is another factor that investors consider when determining the profitability of an investment. In the past year, return on investment (ROI) was 8.60%. Return on equity (ROE) for the past 12 months was 13.90%.

In Tower Semiconductor Ltd.’s quarter-end financial report for June 29, it reported total debt of $230.97 million against cash and short-term investments of $553.72 million. According to the earnings report, the company had a higher net income in the recent quarter than it did in the previous quarter. TSEM’s revenue rose 16.08% during the quarter, while net income inched up to $1.51 billion. While analysts expected Tower Semiconductor Ltd. to report $0.56 quarterly earnings, the actual figure was $0.58 per share, beating the consensus estimate by 3.60%. During the quarter, the company generated $137.68 million in EBITDA. The liabilities of Tower Semiconductor Ltd. were 635.87 million at the end of its most recent quarter ended June 29, and its total debt was $280.26 million.

Technical Picture

This quick technical analysis looks at Tower Semiconductor Ltd.’s (TSEM) price momentum. With a historical volatility rate of 20.05%, the RSI 9-day stood at 67.29% on 23 November.

With respect to its five-day moving average, the current Tower Semiconductor Ltd. price is up by +3.39% percent or $1.44. At present, TSEM shares trade +3.39% above its 20-day simple moving average and -4.12% percent below its 100-day simple moving average. However, the stock is currently trading approximately -2.64% below its SMA50 and +24.89% above its SMA200.

Stochastic coefficient K was 94.78% and Stochastic coefficient D was 94.68%, while ATR was 0.78. Given the Stochastic reading of 96.36% for the 14-day period, the RSI (14) reading has been calculated as 60.77%. As of today, the MACD Oscillator reading stands at 0.59, while the 14-day reading stands at 1.53.

Analyst Ratings

Credit Suisse upgraded its rating on Tower Semiconductor Ltd. (NASDAQ: TSEM) to an Outperform in a note to investors on January 19, 2021. The analysts firm previously had a Neutral rating on the stock.Tower Semiconductor Ltd. (TSEM) has been rated Hold by analysts. According to 0 brokerage firms, TSEM is a sell, and 3 firms recommend it is a Hold. There are 0 analysts who say the stock is underweight. A total of 0 analysts rate Tower Semiconductor Ltd. stock as buy, with 0 recommending it as overweight.

With a median target price of $53.00, the current consensus forecast for the stock is $48.00 – $53.00. Based on these forecasts, analysts predict Tower Semiconductor Ltd. (TSEM) will achieve an average price target of $51.33.


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