Tower Semiconductor (NASDAQ:TSEM) shares surged nearly 8% today after the Israeli semiconductor solutions provider delivered a better-than-anticipated performance for the fourth quarter. Despite a year-over-year decline of 12.7%, revenue of $352 million landed past estimates by $2 million. Similarly, EPS of $0.55 outpaced expectations by $0.02.
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Tower generated $126 million in cash flow from operations for the fourth quarter. For full-year 2023, the company generated revenue of $1.42 billion compared to $1.68 billion in 2022. Still, its net income rose to $518 million from $265 million in 2022.
The company’s performance for 2023 included $314 million from the Intel merger termination and $33 million in restructuring income. Importantly, Tower is witnessing a rebound in multiple market segments. Russell Ellwanger, its CEO, commented, “We left 2023 with multiple powerful doors having been opened, catalyzed through the unrealized merger deal.”
For the upcoming quarter, Tower anticipates revenue of $325 million, +/-5%. Notably, the company is targeting quarter-over-quarter growth throughout 2024. Further, Tower is moving closer to setting up an $8 billion chip plant in India. Tower’s proposal involves the production of 65-nanometer and 40-nanometer chips. These chips can be utilized in multiple end markets, including automotive and wearable devices.
What Is the Target Price for TSEM Stock?
Overall, the Street has a Moderate Buy consensus rating on Tower Semiconductor. Following a nearly 15% jump in the company’s share price over the past three months, the average TSEM price target of $40 points to a further 29.1% potential upside in the stock.
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