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Investors in Tower Semiconductor Ltd. (NASDAQ:TSEM) had a good week, as its shares rose 9.6% to close at US$41.11 following the release of its first-quarter results. It looks like a credible result overall - although revenues of US$358m were in line with what the analysts predicted, Tower Semiconductor surprised by delivering a statutory profit of US$0.35 per share, a notable 20% above expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
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After the latest results, the six analysts covering Tower Semiconductor are now predicting revenues of US$1.55b in 2025. If met, this would reflect a modest 5.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to reduce 3.4% to US$1.76 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.56b and earnings per share (EPS) of US$1.70 in 2025. So the consensus seems to have become somewhat more optimistic on Tower Semiconductor's earnings potential following these results.
See our latest analysis for Tower Semiconductor
There's been no major changes to the consensus price target of US$57.27, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Tower Semiconductor at US$60.00 per share, while the most bearish prices it at US$45.59. 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Tower Semiconductor's rate of growth is expected to accelerate meaningfully, with the forecast 7.9% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 2.8% 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 16% per year. So it's clear that despite the acceleration in growth, Tower Semiconductor is expected to grow meaningfully slower than the industry average.