TSEM

The dominant fact about TSEM is the gap between price and fundamentals. At $286.74 the stock trades at 147.8x FY2025 diluted EPS of $1.94 and 20.6x sales for a foundry earning $220M on $1.57B of revenue — a 7.6% return on equity. That is a multiple reserved for high-growth, high-return compounders, and the data show neither. Revenue grew 9.1% in FY2025 but is essentially flat across the cycle ($1.51B → $1.68B → $1.42B → $1.44B → $1.57B from FY2021–FY2025), and net income has been volatile rather than compounding ($518M in FY2023 collapsing to $208M, then $220M). Operating income rose just 1.5% YoY.

Business quality is fine but not exceptional, and it does not support the price. Gross margin is 23.2% and operating margin 12.4% — respectable for a foundry, unremarkable for a 148x multiple. Notably, the 14.1% net margin sits above the 12.4% operating margin, meaning reported earnings are flattered by non-operating income (likely interest on cash) rather than core operations. ROE of 7.6% is the tell: a large $2.92B equity base is earning a thin return, the opposite of what a premium multiple implies.