ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Tower Semiconductor's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 11.52%.
As of today (2026-06-26), Tower Semiconductor's WACC % is 8.50%. Tower Semiconductor's ROC % is 10.62% (calculated using TTM income statement data).
Tower Semiconductor generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Tower Semiconductor (FRA:TOW) ROC % Explanation
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Tower Semiconductor's WACC % is 8.50%. Tower Semiconductor's ROC % is 10.62% (calculated using TTM income statement data).
Tower Semiconductor generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Tower Semiconductor ROC % Related Terms
Tower Semiconductor ROC % Historical Data
* Premium members only.
The historical data trend for Tower Semiconductor's ROC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Tower Semiconductor (FRA:TOW) has a ROC % of 11.52% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Tower Semiconductor and its competitors.
Is Tower Semiconductor's ROC % too high?
Tower Semiconductor's current ROC % is 11.52%. The Semiconductors industry median ROC % is 3.74. Tower Semiconductor's value of 11.52% is 208% above this industry median. Overall, Tower Semiconductor has a GF Score™ of 70/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Tower Semiconductor's ROC % compare to NVDA and AVGO?
Tower Semiconductor's ROC % of 11.52% can be compared against companies in the Semiconductors industry. The industry median ROC % is 3.74. Tower Semiconductor's value of 11.52% is 208% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Semiconductors company?
The median ROC % among Semiconductors companies is 3.74, based on 1,012 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Tower Semiconductor's current ROC % of 11.52% is 208% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Tower Semiconductor and its competitors. For the Semiconductors industry, the median ROC % is 3.74 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Tower Semiconductor's current ROC % is 11.52%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Tower Semiconductor stock overvalued right now?
Based on GuruFocus' analysis, Tower Semiconductor (FRA:TOW) is currently considered Significantly Overvalued. The stock's GF Value™ is €50.85, compared to a current price of €238.00 — trading 368% above its estimated fair value. The current ROC % is 11.52% and 208% above the Semiconductors industry median of 3.74. Tower Semiconductor's overall GF Score™ is 70/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Tower Semiconductor (FRA:TOW), the current ROC % is 11.52% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Tower Semiconductor (FRA:TOW) Overvalued in 2026?
Based on GuruFocus' analysis, Tower Semiconductor stock appears to be overvalued.
The current stock price of €238.00 is trading 368% above its estimated GF Value™ of €50.85.
GuruFocus considers Tower Semiconductor to be Significantly Overvalued.
Key valuation signals for FRA:TOW:
ROC %: 11.52%
GF Value™: €50.85 vs. price of €238.00 (368% above fair value)
Industry Position: 208% above the Semiconductors median
No single metric tells the full story. See the FRA:TOW stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Tower Semiconductor Ltd is a pure-play specialty foundry that manufactures semiconductors. As a pure-play foundry, it focuses on producing integrated circuits (ICs) based on the design specifications of customers. The company's line of integrated circuits is incorporated into markets, including consumer electronics, personal computers, communications, automotive, and industrial and medical device products. It produces ICs alongside wholly-owned subsidiaries through fabrication facilities located in Japan. The company has a geographical presence in the USA, Japan, Asia (other than Japan), and Europe.
70GF Score
Get the complete analysis for FRA:TOW
ROC % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
FRA:TOW has been successfully added to your 
