Is Tower Semiconductor Ltd. overvalued or undervalued?

As of 17 October 2025, Tower Semiconductor Ltd. has moved from an attractive to an expensive valuation grade. The company appears to be overvalued based on its current metrics, including a P/E ratio of 23, a price-to-book value of 1.66, and an EV to EBITDA of 7.47. In comparison, Amkor Technology, Inc. has a P/E of 23.85 and an EV to EBITDA of 6.64, while Cirrus Logic, Inc. shows a more favorable P/E of 17.26 and an EV to EBITDA of 11.14, indicating that Tower Semiconductor is priced higher relative to its peers.
Despite its strong performance, with a year-to-date return of 43.20% compared to the S&P 500's 13.30%, the valuation metrics suggest that the stock may not justify its current price level. The significant discrepancy between Tower Semiconductor's valuation ratios and those of its peers reinforces the conclusion that it is overvalued.