Buffett Brain · Research note
Score updated 5 Oct 2026 · analysis from 12 Jul 2026
TSEM· Technology
Tower Semiconductor
Tower Semiconductor's weak ROIC of 6.1% and high P/E of 129.6 indicate a lack of durable competitive advantage.
Buffett fit
Weak fit
Owner
27
Durability
50
Management
57
Price
0
Score updated 5 Oct 2026 · analysis from 12 Jul 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned Tower Semiconductor outright, I would be concerned about the weak of 6.1%, significantly below the 13.4% sector top-quintile.
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The business has shown profitability over the last five years, but the revenue CAGR of only 0.95% raises concerns about growth sustainability.
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Management has not engaged in share , with a buyback yield of 0.0%, and the share count has grown at a CAGR of 1.22%.
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The current yield is -0.13%, indicating that the business is not generating sufficient cash flow relative to its valuation.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1Profitable every year over the last 5 years.
- 2Current ratio of 5.63 indicates strong liquidity.
- 3Low ratio of 0.05 shows conservative leverage.
- 4Net debt/EBITDA of -0.17 indicates a net cash position.
Concerns
5- 1 of 6.08% is below the 13.4% top-quintile threshold for the sector.
- 2 of 24.8% is significantly lower than the sector's top-quintile cutoff of 60.9%.
- 3 of 129.6 implies excessive valuation relative to earnings.
- 4 yield of -0.13% suggests cash flow issues.
Price history
$241+724.6%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Tower Semiconductor operates as an independent foundry, manufacturing analog intensive mixed-signal semiconductor devices across various markets including consumer electronics and automotive. The company generated $1.57 billion in revenue but has a low of 24.8%, which is significantly below the sector's top-quintile cutoff of 60.9%. This indicates challenges in and cost management.
What other investors would say
The same company, judged by three other documented playbooks.
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