Is Tower Semiconductor Ltd. overvalued or undervalued?

As of 4 April 2025, Tower Semiconductor Ltd. has moved from an attractive to a fair valuation grade. The company appears to be fairly valued based on its current metrics. The P/E ratio stands at 23, which is higher than the peer average of approximately 21.98, while the EV to EBITDA ratio is 7.47, also above the peer average of 7.18. The PEG ratio is notably high at 22.67, indicating potential overvaluation relative to growth expectations.
In comparison with its peers, Cirrus Logic, Inc. is rated attractive with a P/E of 15.99, while Power Integrations, Inc. is classified as very expensive with a P/E of 82.68. Additionally, Tower's ROCE is at 10.93% and ROE at 7.34%, suggesting moderate efficiency compared to the industry. Recent stock performance shows that Tower has underperformed against the S&P 500, particularly in the year-to-date and three-year periods, which may reinforce the fair valuation assessment.