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Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Tower Semiconductor's Sloan Ratio for the quarter that ended in Mar. 2026 was 7.06%.
As of Mar. 2026, Tower Semiconductor has a Sloan Ratio of 7.06%, indicating the company is in the safe zone and there is no funny business with accruals.
Tower Semiconductor (NAS:TSEM) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Mar. 2026, Tower Semiconductor has a Sloan Ratio of 7.06%, indicating the company is in the safe zone and there is no funny business with accruals.
Tower Semiconductor Sloan Ratio % Related Terms
Tower Semiconductor Sloan Ratio % Historical Data
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The historical data trend for Tower Semiconductor's Sloan Ratio % 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.
For the Semiconductors subindustry, Tower Semiconductor's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Tower Semiconductor Sloan Ratio % vs Semiconductors Industry
For the Semiconductors industry and Technology sector, Tower Semiconductor's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Tower Semiconductor's Sloan Ratio % falls into.
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Tower Semiconductor's Sloan Ratio for the fiscal year that ended in Dec. 2025 is calculated as
Tower Semiconductor's Net Income for the trailing twelve months (TTM) ended in Mar. 2026 was 46.551 (Jun. 2025 ) + 53.645 (Sep. 2025 ) + 80.132 (Dec. 2025 ) + 65.032 (Mar. 2026 ) = $245 Mil.
Tower Semiconductor's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2026 was 122.599 (Jun. 2025 ) + 139.423 (Sep. 2025 ) + 39.538 (Dec. 2025 ) + 509.969 (Mar. 2026 ) = $812 Mil.
Tower Semiconductor's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2026 was -138.682 (Jun. 2025 ) + -123.49 (Sep. 2025 ) + -68.978 (Dec. 2025 ) + -496.368 (Mar. 2026 ) = $-828 Mil.
* 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 (TSEM) has a Sloan Ratio % of 7.06% as of Mar. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Tower Semiconductor and its competitors.
Is Tower Semiconductor's Sloan Ratio % too high?
Tower Semiconductor's current Sloan Ratio % is 7.06%. Overall, Tower Semiconductor has a GF Score™ of 71/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Tower Semiconductor's Sloan Ratio % compare to NVDA and AVGO?
Tower Semiconductor's Sloan Ratio % of 7.06% can be compared against companies in the Semiconductors industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for a Semiconductors company?
A good Sloan Ratio % depends on the Semiconductors industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Tower Semiconductor and its competitors. Tower Semiconductor's current Sloan Ratio % is 7.06%. 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 (TSEM) is currently considered Significantly Overvalued. The stock's GF Value™ is $57.90, compared to a current price of $234.32 — trading 304.7% above its estimated fair value. The current Sloan Ratio % is 7.06%. Tower Semiconductor's overall GF Score™ is 71/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Tower Semiconductor (TSEM), the current Sloan Ratio % is 7.06% 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 (TSEM) Overvalued in 2026?
Based on GuruFocus' analysis, Tower Semiconductor stock appears to be overvalued.
The current stock price of $234.32 is trading 304.7% above its estimated GF Value™ of $57.90.
GuruFocus considers Tower Semiconductor to be Significantly Overvalued.
Key valuation signals for TSEM:
Sloan Ratio %: 7.06%
GF Value™: $57.90 vs. price of $234.32 (304.7% above fair value)
No single metric tells the full story. See the TSEM 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.
71GF Score
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