Is It Too Late To Consider TTM Technologies (TTMI) After A 347% One Year Surge?

TTM Technologies has caught the eye of many investors who are asking the same question you might be asking now: is the current share price offering good value, or are you arriving late?

The stock recently closed at US$97.54, with returns of 1.2% over 7 days, 6.3% over 30 days, 38.1% year to date and 347.2% over the last year, while the 3 year and 5 year returns are both very large.

Recent coverage has focused on how these strong returns have pushed TTM Technologies further onto investors' radar, with attention on whether the current price still reflects its fundamentals. Commentary has also highlighted that such a rapid multi year move can change how investors think about both upside potential and downside risk.

Simply Wall St currently gives TTM Technologies a valuation score of 3 out of 6, so the rest of this article will walk through how different valuation approaches line up with that score and then finish with a way to think about valuation that goes beyond the usual models.

TTM Technologies delivered 347.2% returns over the last year. See how this stacks up to the rest of the Electronic industry.

Approach 1: TTM Technologies Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business might be worth by projecting its future cash flows and then discounting those back to today’s dollars.

For TTM Technologies, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is reported at about $47.4 million. Based on analyst input for the earlier years and then extrapolated projections, Simply Wall St models free cash flows rising to around $1.1 billion in 2035, all expressed in US$ terms.

Those future cash flows are discounted to today and summed to arrive at an estimated intrinsic value of about $131.18 per share. At the recent share price of $97.54, this implies the shares trade at roughly a 25.6% discount to that DCF estimate. On this model alone, the stock appears undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests TTM Technologies is undervalued by 25.6%. Track this in your watchlist or portfolio, or discover 49 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for TTM Technologies.

Approach 2: TTM Technologies Price vs Earnings

For profitable companies, the P/E ratio is a useful way to relate what you pay for the stock to the earnings it produces. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk typically points to a lower, more conservative P/E being seen as normal.

TTM Technologies currently trades on a P/E of 56.84x. That sits above the Electronic industry average P/E of 28.98x and also above the peer group average of 33.76x. Simply Wall St’s Fair Ratio for TTM Technologies is 55.86x, which is a proprietary estimate of what the P/E might be given factors such as earnings growth, profit margins, the company’s industry, market cap and key risks.

This Fair Ratio can be more tailored than a simple peer or industry comparison, because it attempts to adjust for company specific drivers rather than assuming that one size fits all. With the Fair Ratio of 55.86x sitting close to the current P/E of 56.84x, the valuation on this metric looks broadly in line with what the model suggests.

Result: ABOUT RIGHT

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Upgrade Your Decision Making: Choose your TTM Technologies Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Meet Narratives, a simple way for you to attach a clear story about TTM Technologies to your own numbers by linking what you think about its AI and defense exposure, future revenue, earnings and margins to a forecast and then to a Fair Value that can be compared with the current price on Simply Wall St's Community page. There, millions of investors share views that update automatically as new news or earnings arrive. For example, one TTM Technologies Narrative might lean toward the higher Fair Value of about US$123.00 with stronger revenue and margin expectations, while another might sit closer to the lower Fair Value of about US$72.00 with more cautious assumptions. Seeing those side by side can help you decide whether the current market price looks high, low, or roughly in line with the story you believe.

For TTM Technologies however, we will make it really easy for you with previews of two leading TTM Technologies Narratives:

🐂 TTM Technologies Bull Case

Fair value: US$119.73

Implied discount to fair value: about 18.5% based on the latest close of US$97.54

Revenue growth assumption: 17.52%

• Frames TTM Technologies as a key supplier to both generative AI data centers and defense programs, backed by a US$1.6b aerospace and defense backlog and a growing AI related revenue mix.
• Highlights recent quarterly results, including US$774.3m in net sales and adjusted EBITDA margins of 16.3%, plus capacity expansions such as the Eau Claire facility aimed at high security customers.
• Arrives at a US$119.73 fair value using a 19.5x forward P/E on 2027 EPS estimates and views the current price as below that intrinsic value on these assumptions.

🐻 TTM Technologies Bear Case

Fair value: US$72.00

Implied premium to fair value: about 35.7% based on the latest close of US$97.54

Revenue growth assumption: 8.06%

• Focuses on concentration risks, with a large share of revenue tied to aerospace and defense and AI related demand, plus significant exposure to a small group of large data center customers.
• Points to execution and margin risks from heavy capital spending in Penang and Syracuse, as well as current margin headwinds while these facilities ramp.
• Uses bearish analyst assumptions to arrive at a US$72.00 fair value, based on revenue reaching US$3.5b and earnings of US$292.3m by 2029 and a 33.9x P/E on those earnings, which is below the current share price.

If you want to go deeper into these views and see how other investors are joining the discussion on TTM Technologies, you can start with the full bull and bear Narratives linked above, and then compare them with the wider community range of Narratives over the same stock.

Do you think there's more to the story for TTM Technologies? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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