We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
TTMI’s shares have also lagged industry peers, including CPS Technologies (CPSH - Free Report) , Rogers (ROG - Free Report) and nVent Electric (NVT - Free Report) . While CPS Technologies returned 1.4% over the same period, Rogers and nVent Electric lost 7.2% and 34%, respectively.
TTMI Lags Sector, Industry & Peers in Six Months
Image Source: Zacks Investment Research
However, TTMI's share-price weakness contrasts sharply with its improving business performance. Third-quarter 2026 revenues surged 60% year over year, adjusted EBITDA margin reached a record 20.1%, and management provided an encouraging preliminary outlook for 2027.
Accelerating AI infrastructure demand, record aerospace and defense backlog, and improving profitability and earnings estimates provide three reasons investors may want to reconsider the stock despite its steep decline. Let's delve.
TTMI is benefiting from the growing complexity of AI servers and networking equipment, where higher data speeds require sophisticated interconnect designs. Its N+M asymmetric PCB technology addresses these requirements and supports deeper engagement with major computing and networking customers. Unlike conventional volume-driven PCB growth, this shift toward technically demanding boards can improve product mix, differentiation and profitability.
Data center and networking revenues surged 115% year over year in the third quarter of 2026 and contributed 41% of total sales. The company expects that share to reach approximately 49% in the fourth quarter. N+M products currently account for about 30% of the data center and networking business, with management anticipating roughly 50% in 2027. The planned additional $400 million capacity expansion, stretching into early 2028, demonstrates confidence in customer roadmaps, although successful ramp-ups and utilization will be crucial.
Record Defense Backlog Provides Long-Term Revenue Visibility
TTMI's aerospace and defense (A&D) business provides another important growth driver alongside AI-related demand. Third-quarter A&D sales increased 21% year over year, representing 34% of total revenues.
More importantly, the business generated a record $2 billion A&D program backlog, compared with just under $1.5 billion a year earlier. Its quarterly book-to-bill ratio reached approximately 1.6, reflecting strong bookings and continued demand across defense programs.
Bookings related to SPY-6 and APS-143 radar systems, Golden Dome and restricted defense programs underpin the opportunity. Management also has visibility into approximately 65% of its projected A&D revenues for 2027.
This level of program visibility provides a longer planning horizon and improves confidence in future revenue opportunities. The company's exposure to specialized, mission-critical defense electronics also supports its strategy of participating in longer-cycle programs.
The completed acquisitions of Swiss Technology Group and Epiq Solutions further expand TTMI's specialized manufacturing and communications capabilities. The proposed $650 million Ophir Optics acquisition could strengthen its position in infrared imaging and laser optics, although the transaction remains subject to regulatory approvals and other customary closing conditions.
Profitability, Earnings Revisions and Valuation Strengthen the Case
TTMI's improving profitability provides a third reason to consider the stock. Third-quarter 2026 adjusted EBITDA margin reached a record 20.1%, expanding 400 basis points year over year. Its non-GAAP operating margin improved 510 basis points to 17.4%.
Operating cash flow totaled $154.7 million, while free cash flow increased to $74.8 million from $42.6 million in the prior-year quarter. These improvements reflect higher volumes, stronger mix and better manufacturing execution rather than relying solely on revenue growth.
For the fourth quarter of 2026, management expects sales of $1.42 billion-$1.44 billion and non-GAAP EPS of $1.77-$1.83. Its full-year 2026 outlook calls for revenues of $4.47 billion-$4.49 billion and non-GAAP EPS of $4.97-$5.03.
The preliminary 2027 outlook is particularly encouraging, with management projecting revenues of $6.5 billion-$6.75 billion and non-GAAP EPS of $8.10-$8.90. These projections include contributions from completed acquisitions and associated financing costs but exclude pending acquisitions.
Earnings estimate revisions provide additional support. The Zacks Consensus Estimate for 2026 EPS has increased to $5.00 from $4.82 over the past 60 days, indicating projected year-over-year growth of 103.3%. The 2027 consensus estimate has climbed to $8.61 from $6.90, implying another 72.1% increase.
For the fourth quarter of 2026, the consensus EPS estimate rose to $1.79 from $1.73, while first-quarter 2027 estimates climbed to $1.88 from $1.48.
Image Source: Zacks Investment Research
The valuation reset looks compelling, with TTMI carrying a Value Score of B and a VGM Score of A, signaling a favorable investment profile. The stock trades at 10.06X forward 12-month earnings, representing a discount of approximately 59% to the industry's 16.84X multiple. Its current valuation is also well below its historical median of 29.67X. This sharp valuation compression, despite improving operating performance and upward earnings estimate revisions, makes the stock's current multiple noteworthy. TTMI also trades at a lower P/E multiple than its peers, with CPS Technologies, Rogers and nVent Electric trading at 80.5X, 27.58X and 17.27X, respectively.
Price/Earnings Ratio (F12M)
Image Source: Zacks Investment Research
What Should Investors Watch?
Despite the encouraging operating trends, investors should monitor acquisition-related leverage, customer concentration and the execution of planned capacity expansions. TTMI reported total debt of approximately $1.66 billion and cash of $876.3 million as of Sept. 28, 2026. Its customer concentration also warrants attention, with one customer accounting for approximately 20% of third-quarter sales.
Consequently, sustaining margin expansion, converting customer demand into shipments and managing acquisition-related debt will be essential to supporting the company's growth outlook.
Conclusion
Despite TTMI shares' steep decline, the company is benefiting from accelerating AI infrastructure demand, a record aerospace and defense backlog and improving profitability. Its expanding N+M technology portfolio, strong customer programs and planned capacity investments continue to strengthen its growth prospects. With earnings estimates trending higher and the stock trading at a significant valuation discount to the industry and historical levels, TTMI's investment case appears increasingly attractive for long-term investors.
View the Zacks #1 Rank List
Image: Bigstock
3 Key Reasons to Buy TTMI Stock Despite a 54% Six-Month Slide
Key Takeaways
Shares of TTM Technologies (TTMI - Free Report) have plunged 53.8% over the six months, substantially underperforming the Electronics - Miscellaneous Components industry’s 24.3% decline and the broader Computer and Technology sector’s 10.6% drop.
TTMI’s shares have also lagged industry peers, including CPS Technologies (CPSH - Free Report) , Rogers (ROG - Free Report) and nVent Electric (NVT - Free Report) . While CPS Technologies returned 1.4% over the same period, Rogers and nVent Electric lost 7.2% and 34%, respectively.
TTMI Lags Sector, Industry & Peers in Six Months
Image Source: Zacks Investment Research
However, TTMI's share-price weakness contrasts sharply with its improving business performance. Third-quarter 2026 revenues surged 60% year over year, adjusted EBITDA margin reached a record 20.1%, and management provided an encouraging preliminary outlook for 2027.
Accelerating AI infrastructure demand, record aerospace and defense backlog, and improving profitability and earnings estimates provide three reasons investors may want to reconsider the stock despite its steep decline. Let's delve.
AI-Driven Interconnect Demand Expands TTMI’s Opportunity
TTMI is benefiting from the growing complexity of AI servers and networking equipment, where higher data speeds require sophisticated interconnect designs. Its N+M asymmetric PCB technology addresses these requirements and supports deeper engagement with major computing and networking customers. Unlike conventional volume-driven PCB growth, this shift toward technically demanding boards can improve product mix, differentiation and profitability.
Data center and networking revenues surged 115% year over year in the third quarter of 2026 and contributed 41% of total sales. The company expects that share to reach approximately 49% in the fourth quarter. N+M products currently account for about 30% of the data center and networking business, with management anticipating roughly 50% in 2027. The planned additional $400 million capacity expansion, stretching into early 2028, demonstrates confidence in customer roadmaps, although successful ramp-ups and utilization will be crucial.
Record Defense Backlog Provides Long-Term Revenue Visibility
TTMI's aerospace and defense (A&D) business provides another important growth driver alongside AI-related demand. Third-quarter A&D sales increased 21% year over year, representing 34% of total revenues.
More importantly, the business generated a record $2 billion A&D program backlog, compared with just under $1.5 billion a year earlier. Its quarterly book-to-bill ratio reached approximately 1.6, reflecting strong bookings and continued demand across defense programs.
Bookings related to SPY-6 and APS-143 radar systems, Golden Dome and restricted defense programs underpin the opportunity. Management also has visibility into approximately 65% of its projected A&D revenues for 2027.
This level of program visibility provides a longer planning horizon and improves confidence in future revenue opportunities. The company's exposure to specialized, mission-critical defense electronics also supports its strategy of participating in longer-cycle programs.
The completed acquisitions of Swiss Technology Group and Epiq Solutions further expand TTMI's specialized manufacturing and communications capabilities. The proposed $650 million Ophir Optics acquisition could strengthen its position in infrared imaging and laser optics, although the transaction remains subject to regulatory approvals and other customary closing conditions.
Profitability, Earnings Revisions and Valuation Strengthen the Case
TTMI's improving profitability provides a third reason to consider the stock. Third-quarter 2026 adjusted EBITDA margin reached a record 20.1%, expanding 400 basis points year over year. Its non-GAAP operating margin improved 510 basis points to 17.4%.
Operating cash flow totaled $154.7 million, while free cash flow increased to $74.8 million from $42.6 million in the prior-year quarter. These improvements reflect higher volumes, stronger mix and better manufacturing execution rather than relying solely on revenue growth.
For the fourth quarter of 2026, management expects sales of $1.42 billion-$1.44 billion and non-GAAP EPS of $1.77-$1.83. Its full-year 2026 outlook calls for revenues of $4.47 billion-$4.49 billion and non-GAAP EPS of $4.97-$5.03.
The preliminary 2027 outlook is particularly encouraging, with management projecting revenues of $6.5 billion-$6.75 billion and non-GAAP EPS of $8.10-$8.90. These projections include contributions from completed acquisitions and associated financing costs but exclude pending acquisitions.
Earnings estimate revisions provide additional support. The Zacks Consensus Estimate for 2026 EPS has increased to $5.00 from $4.82 over the past 60 days, indicating projected year-over-year growth of 103.3%. The 2027 consensus estimate has climbed to $8.61 from $6.90, implying another 72.1% increase.
For the fourth quarter of 2026, the consensus EPS estimate rose to $1.79 from $1.73, while first-quarter 2027 estimates climbed to $1.88 from $1.48.
Image Source: Zacks Investment Research
The valuation reset looks compelling, with TTMI carrying a Value Score of B and a VGM Score of A, signaling a favorable investment profile. The stock trades at 10.06X forward 12-month earnings, representing a discount of approximately 59% to the industry's 16.84X multiple. Its current valuation is also well below its historical median of 29.67X. This sharp valuation compression, despite improving operating performance and upward earnings estimate revisions, makes the stock's current multiple noteworthy. TTMI also trades at a lower P/E multiple than its peers, with CPS Technologies, Rogers and nVent Electric trading at 80.5X, 27.58X and 17.27X, respectively.
Price/Earnings Ratio (F12M)
Image Source: Zacks Investment Research
What Should Investors Watch?
Despite the encouraging operating trends, investors should monitor acquisition-related leverage, customer concentration and the execution of planned capacity expansions. TTMI reported total debt of approximately $1.66 billion and cash of $876.3 million as of Sept. 28, 2026. Its customer concentration also warrants attention, with one customer accounting for approximately 20% of third-quarter sales.
Consequently, sustaining margin expansion, converting customer demand into shipments and managing acquisition-related debt will be essential to supporting the company's growth outlook.
Conclusion
Despite TTMI shares' steep decline, the company is benefiting from accelerating AI infrastructure demand, a record aerospace and defense backlog and improving profitability. Its expanding N+M technology portfolio, strong customer programs and planned capacity investments continue to strengthen its growth prospects. With earnings estimates trending higher and the stock trading at a significant valuation discount to the industry and historical levels, TTMI's investment case appears increasingly attractive for long-term investors.
The stock currently has a Zacks Rank #2 (Buy), indicating that investors may consider accumulating shares at current levels. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.