TTM Technologies TTMI has been suffering from mounting challenges, hindering its growth trajectory. Year-over-year declines in revenues from the medical, industrial, instrumentation and automotive end markets, led by persistent inventory normalization and weak demand, have been negatively impacting revenues.

TTMI’s ongoing consolidation of manufacturing facilities, while aimed at improving efficiency, is causing short-term disruptions and operational challenges. Moreover, the slow ramp-up of TTMI’s Penang, Malaysia facility has been delaying revenue contributions from critical commercial markets.

TTMI’s planned advanced technology facility in Syracuse, New York, designed to produce Ultra HDI PCBs, is not expected to commence production until 2026, deferring the anticipated benefits for years.

Operating in a fiercely competitive market, TTMI faces well-established rivals like Crane Company, Sanmina SANM, Bae Systems BAESY and Mercury Systems MRCY. Despite outperforming the above-mentioned peers over the past three-month period, TTMI faces challenges in maintaining differentiation and market share expansion.

Over the past three-month period, TTMI shares have returned 34%. MRCY shares have gained 13.4% and SANM shares have returned 12.2%. Shares of BAESY have declined 17.1% in the same time frame.

In comparison, the Zacks Computer and Technology sector has returned 5.5%, while the Zacks Electronics – Miscellaneous Components industry has lost 4.6% over the past three months.

Exiting the third quarter of 2024, TTMI’s top five customers accounted for 41% of total revenues, with one customer contributing over 10%. Such dependence on a concentrated customer base increases its vulnerability to demand fluctuations or loss of critical customers.

Furthermore, macroeconomic uncertainties and geopolitical tensions are disrupting TTMI’s supply chains and amplifying near-term headwinds, weighing heavily on TTMI’s outlook.

TTMI 4Q24 Outlook Not So Rosy

For the fourth quarter of 2024, TTMI expects net sales to be $610 million to $650 million. It expects non-GAAP earnings between 44 cents and 50 cents per share, inclusive of operating costs associated with the starting up of its Penang facility.

Continued inventory adjustments and soft demand from key customers in the automotive market are expected to further reduce fourth-quarter 2024 automotive revenues to 12% of total sales.

The medical, industrial and instrumentation end markets are expected to remain flat sequentially and contribute 14% toward total revenues.

TTMI’s 2025 Earnings Estimates Trend Downward

The Zacks Consensus Estimate for TTMI’s fourth-quarter 2024 earnings is pegged at 47 cents per share, unchanged over the past 60 days, indicating growth of 14.63% on a year-over-year basis.

The consensus mark for fourth-quarter 2024 revenues is pegged at $629.15 million, suggesting year-over-year growth of 10.56%.

The Zacks Consensus Estimate for TTMI’s 2025 earnings is pegged at $1.97 per share, down 1.5% over the past 30 days, implying growth of 24.31% on a year-over-year basis.

The consensus mark for 2025 revenues is pegged at $2.55 billion, indicating year-over-year growth of 5.38%.

TTMI beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and was in line in one quarter, the average surprise being 10.08%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

TTMI Stock: Buy, Hold or Sell?

Given the numerous challenges TTMI faces, including declining revenues in key markets, operational disruptions, intense competition and macroeconomic headwinds, its near-term prospects remain dull.

TTMI currently carries a Zacks Rank #4 (Sell), suggesting that it may be wise for investors to stay away from the stock for the time being.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Bae Systems PLC (BAESY) : Free Stock Analysis Report

TTM Technologies, Inc. (TTMI) : Free Stock Analysis Report

Sanmina Corporation (SANM) : Free Stock Analysis Report

Mercury Systems Inc (MRCY) : Free Stock Analysis Report

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